RRSP vs TFSA Calculator for Canada
Which account leaves you with more after tax? Compare the same money in an RRSP or a TFSA, with the 2026 brackets for your province. Last reviewed October 18, 2026.
The RRSP comes out ahead by $4,950
The rule of thumb: an RRSP wins when your tax rate in retirement is lower than your rate now, a TFSA wins when it is higher, and they tie when the rates match. Check your contribution room and the effect on income-tested benefits before choosing.
Uses the CRA's 2026 federal and Ontario brackets for both periods, held constant. Contribution room, Old Age Security and GIS clawbacks, RRIF minimums and growth after withdrawals begin are not modelled. An estimate, not tax advice.
How the RRSP vs TFSA comparison works
An RRSP contribution is deducted from your income, so it comes with a tax refund, and the withdrawals are taxed later. A TFSA contribution gets no deduction, but its growth and withdrawals are tax-free. To compare them fairly this calculator spends the same after-tax money on both: the refund pays for the RRSP contribution, and the TFSA gets the pre-tax amount minus that refund. Both grow at the same return, then the RRSP is taxed as you withdraw it.
What this calculator assumes
- Tax now and in retirement come from the CRA's 2026 brackets for your province, held constant. The refund is the real difference in tax with and without the deduction.
- RRSP withdrawals are spread evenly over the years you choose, on top of your other retirement income. Growth after withdrawals begin is ignored.
- Not modelled: contribution room (check your CRA notice of assessment), Old Age Security and Guaranteed Income Supplement clawbacks, RRIF minimum withdrawals, and the TFSA's lack of any effect on benefits, which can favour the TFSA.
- Equal rates make the two accounts tie. The result swings with your retirement income, so try a few values.
Frequently asked questions
Is an RRSP or a TFSA better in Canada?
It depends on your tax rate now compared with your tax rate when you withdraw. If you expect a lower rate in retirement, the RRSP usually wins; if you expect the same or a higher rate, or may need the money before retirement, the TFSA is at least as good.
Should I invest my RRSP refund?
Yes. The refund is what makes the comparison fair. This calculator treats it as paying for the contribution; if you contribute the full pre-tax amount from your pocket and invest the refund too, the RRSP comes out further ahead.
Does a TFSA affect Old Age Security or GIS?
No. TFSA withdrawals are not income, so they do not trigger the OAS clawback or reduce the GIS. RRSP and RRIF withdrawals are income and can. This calculator does not model that effect.
What if I am in a low tax bracket now?
A low rate now means a small RRSP refund, and the TFSA often wins, especially if you may earn more later or want flexible access to the money.
Related
Educational estimates, not tax, legal or investment advice. Talk to a licensed Canadian CPA or CFP before acting.