RRSP vs TFSA Calculator
See which account leaves you more after-tax money, based on your tax rate now versus when you withdraw.
RRSP vs TFSA After-Tax Result
RRSP After-Tax Value
$34,335
TFSA After-Tax Value
$30,043
RRSP
TFSA
What Is the RRSP vs TFSA Calculator?
RRSP and TFSA contributions work in opposite tax directions: an RRSP contribution is deducted from your taxable income now, grows tax-deferred, and is fully taxed as income when withdrawn. A TFSA contribution is made with money you've already paid tax on, grows completely tax-free, and is withdrawn tax-free. This calculator shows which one leaves you with more after-tax money, based on your marginal tax rate now versus your expected rate when you withdraw.
The genuinely surprising, mathematically provable result: if your tax rate is exactly the same at contribution and withdrawal, RRSP and TFSA produce identical after-tax outcomes for the same pre-tax contribution amount — the entire advantage of one over the other comes purely from a difference between your tax rate now and your tax rate later.
RRSP vs TFSA Calculator Formula
RRSP After-Tax = Contribution × (1 + Return)^Years × (1 − Future Tax Rate)
TFSA After-Tax = Contribution × (1 − Current Tax Rate) × (1 + Return)^Years
How Is the RRSP vs TFSA Calculator Calculated?
For a fair comparison, this calculator treats your contribution amount as a fixed pre-tax dollar figure. The full amount goes into an RRSP (since RRSP contributions are made pre-tax and generate a tax refund at your current rate). Only the after-tax equivalent — the same amount minus what you'd have paid in tax on it — can go into a TFSA, since TFSA contributions come from money you've already been taxed on. Both amounts then grow at the same assumed rate of return.
At withdrawal, the RRSP balance is fully taxed at your future marginal rate, while the TFSA balance is withdrawn completely tax-free. Comparing the two final after-tax figures directly shows which account came out ahead — and the math reduces to a simple relationship: RRSP wins if your future rate is lower than your current rate, TFSA wins if it's higher, and they're identical if the rates match.
RRSP vs TFSA Calculator Example
$10,000 contributed at a 30% current tax rate, withdrawn after 25 years at 6% annual return, taxed at a lower 20% rate in retirement: RRSP grows to about $34,335 after tax, while TFSA reaches about $30,043 — RRSP wins by about $4,292, since the withdrawal-time tax rate is lower than the contribution-time rate.
The same $10,000 contribution and 25-year, 6% growth, but with the tax rates reversed — a lower 20% rate now and a higher 30% rate expected at withdrawal: TFSA now wins by the same $4,292 margin, since the direction of the tax-rate gap flipped.
$10,000 at a 25% rate both now and at withdrawal, over 20 years at 5% return: RRSP and TFSA both reach exactly $19,900 — a clean, verified illustration that the accounts are mathematically identical when the tax rate doesn't change.
How to Use the RRSP vs TFSA Calculator
Step 1
Enter the pre-tax dollar amount you're considering contributing.
Step 2
Enter your current marginal tax rate and your expected marginal tax rate at withdrawal.
Step 3
Enter how many years until you expect to withdraw, and your expected annual return.
Step 4
Compare the after-tax result for RRSP versus TFSA.
Benefits
- Shows the real after-tax comparison, not just gross account balances.
- Demonstrates the mathematically provable equivalence when tax rates don't change — a commonly misunderstood point.
- Uses current 2026 CRA contribution limits for context.
- Works for any combination of current and expected future tax rates.
- Free, instant, and runs entirely in your browser.
Common RRSP vs TFSA Calculator Scenarios
Scenario 1
Deciding whether to prioritize RRSP or TFSA contributions this year.
Scenario 2
Understanding why RRSP is often recommended during high-income working years and TFSA during lower-income years.
Scenario 3
Modeling how retiring into a lower tax bracket changes the RRSP-vs-TFSA calculus.
Scenario 4
Explaining to someone why the accounts aren't simply "one is always better" than the other.
Scenario 5
Checking the impact of an expected future tax bracket change (promotion, retirement, pension income) on this decision.
Understanding Your Result
The winning account in this calculator is whichever one benefits from the direction of your tax rate change. RRSPs are typically favoured during high-earning working years when your current rate is likely higher than your rate will be in retirement. TFSAs are often favoured for lower-income years, or when you expect a similar or higher tax rate later — for example, if a large RRSP balance itself creates enough retirement income to push you back into a high bracket, or you expect higher income in the future for other reasons.
This calculator isolates the pure tax-rate-arbitrage question. In practice, many Canadians use both accounts strategically — RRSP contribution room and TFSA contribution room are separate and both renew, so this isn't necessarily an either-or decision for your total available savings.
Tips
- This calculator assumes you know your future tax rate, which is genuinely uncertain — many financial advisors suggest splitting contributions between RRSP and TFSA specifically to hedge against that uncertainty.
- RRSP withdrawals in retirement count as income and can affect income-tested benefits like Old Age Security, which gets clawed back above a certain income threshold — TFSA withdrawals don't count as income and don't trigger this.
- RRSP contribution room is based on 18% of your prior year's earned income, up to the annual dollar maximum ($33,810 for 2026) — check your Notice of Assessment for your specific available room.
- TFSA contribution room accumulates every year from age 18 regardless of income, and withdrawn amounts are added back to your room the following calendar year, unlike RRSP.
- If you're unsure about your future tax rate, TFSA offers more flexibility since there's no tax consequence to withdrawing early, while an RRSP withdrawal before retirement is fully taxed and permanently loses that contribution room.
Common Mistakes
- Assuming one account is always objectively better, when the entire advantage depends on the direction of your tax rate change between now and withdrawal.
- Forgetting that RRSP withdrawals count as taxable income and can affect income-tested benefits, while TFSA withdrawals don't.
- Not accounting for RRSP contribution room being tied to earned income (18% up to the annual maximum), unlike TFSA which is a flat amount for everyone.
- Withdrawing from an RRSP before retirement without realizing the contribution room is permanently lost, unlike a TFSA where withdrawn room is restored the following year.
- Treating this as a strictly either-or decision, when many people have room and reason to contribute to both accounts over time.
Frequently Asked Questions
Is RRSP or TFSA always the better choice?
Neither is universally better — it depends entirely on whether your tax rate at withdrawal will be lower, higher, or the same as your tax rate at contribution. This calculator lets you test your own assumptions.
Why would RRSP and TFSA produce identical results?
Because an RRSP contribution's tax refund and a TFSA contribution's after-tax cost are mathematically two sides of the same coin — if your tax rate doesn't change between contribution and withdrawal, the compounding growth and eventual tax treatment cancel out exactly, leaving the same after-tax result.
What is the 2026 RRSP contribution limit?
$33,810, or 18% of your previous year's earned income, whichever is lower, plus any unused contribution room carried forward from previous years — check your Notice of Assessment for your specific limit.
What is the 2026 TFSA contribution limit?
$7,000 for the year, added to your cumulative room — someone who has never contributed and has been eligible (18 or older, Canadian resident) since the TFSA's 2009 introduction would have $109,000 in total available room by 2026.
Does this calculator account for Old Age Security clawback?
No — this is a pure after-tax comparison of the two accounts. RRSP/RRIF withdrawals count as taxable income and can trigger the Old Age Security clawback if your total income is high enough in retirement, which is a real additional consideration beyond this calculator's scope.
Can I contribute to both RRSP and TFSA?
Yes — they have entirely separate contribution room, and many Canadians use both. This calculator compares them for a single contribution decision, not as a mutually exclusive choice for all your savings.
Why is RRSP often recommended for high earners?
Because the tax deduction is worth more at a high marginal rate now, and many high earners expect to be in a lower tax bracket in retirement once their income drops — this is exactly the scenario where RRSP mathematically wins.
Why might TFSA be better for someone with a lower income now?
If your current tax rate is already low, the RRSP deduction is worth less, and you may expect a similar or higher tax rate later (from career growth or larger retirement income) — in that case, TFSA's tax-free growth and withdrawal can come out ahead.
Does this calculator account for RRSP contribution room being tied to income?
No — it takes your contribution amount as a given input. In practice, your actual available RRSP room depends on 18% of your prior year's earned income, which is a separate constraint from the tax-rate comparison this calculator focuses on.
What happens if I withdraw from my RRSP before retirement?
The withdrawal is fully taxed as income in that year, and unlike a TFSA, the contribution room is not restored — this is a real cost to using an RRSP as anything other than long-term retirement savings.
Does this calculator model investment fees or account-specific costs?
No — it assumes the same rate of return in both accounts, focusing purely on the tax treatment difference. Real-world fees and investment choices would apply similarly to both account types in most cases.
Can I share this comparison as an image?
Yes — tap Share and, on supported devices, your result is shared as a branded image card, not just a text link.
References
Important Information
This calculator provides estimates for informational purposes only and is not tax or financial advice. Uses confirmed 2026 CRA RRSP and TFSA contribution limits for context; the core comparison depends entirely on the tax rates you enter, which are estimates about your own future circumstances. Does not model Old Age Security clawback, investment fees, or RRSP contribution room based on earned income. Confirm your specific situation with a qualified financial advisor or the CRA.
Last updated: August 2026