Calcuvelo
Guides
Free • No sign-up • Private

RRSP vs. TFSA Calculator

Same pre-tax income, two accounts: the winner depends on your tax rate now and in retirement.

Reviewed by the Calcuvelo team · Last updated October 26, 2026

Using Ontario tax rates (). Outside Ontario? Enter your marginal tax rate below.

$
$

Used to estimate your marginal tax rate.

%

Outside Ontario, untick the box and type your combined federal + provincial rate.

%
%
yrs

Marginal rate now

RRSP after tax

TFSA (tax-free)

Difference (RRSP − TFSA)

Check your limits: the 2026 RRSP dollar limit is and the TFSA annual limit is ; your personal room may be different.
Adjust the inputs above to see the breakdown.
If your retirement tax rate is…RRSP after taxTFSAWinner

Assumes the same return in both accounts, a constant marginal rate in retirement, and that withdrawals do not affect income-tested benefits. The income-based estimate uses Ontario tax rates; outside Ontario, untick it and enter your own marginal rate. Estimates only.

What is the RRSP vs. TFSA Calculator?

“RRSP or TFSA first?” is the most common savings question in Canada, and the honest answer is: it depends on two tax rates. This calculator takes the same pre-tax income and runs it through both accounts. The RRSP defers tax, so you get a deduction now and pay tax on the withdrawal later. The TFSA reverses that, so you pay tax now and pay none on the growth or the withdrawal. The winner depends on whether your tax rate is higher today or in retirement.

The tool estimates your current marginal rate from your income, lets you set the rate you expect in retirement, and shows the result in dollars as well as the break-even point.

Inputs, in plain terms

  • Income and marginal rate. Your income is used to estimate your combined federal and Ontario marginal tax rate (2026): the rate applied to your next dollar of income. If you live outside Ontario, or would rather use your own figure, untick the estimate and type your combined federal and provincial rate.
  • Expected tax rate in retirement. The rate that will apply to your RRSP withdrawals. A common planning rule is to think about your marginal rate on retirement income, not your average rate. If you expect pension, CPP and OAS income to leave you in a lower bracket than now, enter something lower.
  • Amount to invest (pre-tax). The income you are deciding about, before income tax.
  • Return and years. Growth rate and time horizon. The same return is used for both accounts.

How does the underlying math work?

Take A dollars of pre-tax income, a return r, N years, a current marginal rate tnow and a retirement rate tlater:

RRSP after tax = A × (1 + r)N × (1 − tlater)
TFSA = A × (1 − tnow) × (1 + r)N

Both accounts grow at the same rate, so the growth factor cancels out. The only thing that separates them is (1 − tlater) versus (1 − tnow). If tlater is lower than tnow, the RRSP wins; if higher, the TFSA wins; if equal, they tie. This assumes the RRSP tax refund is invested rather than spent, which the pre-tax framing builds in: the refund is the tax you did not pay on the full amount A.

Worked example: $5,000 of pre-tax income over 25 years

Assume 6% a year for 25 years, so the growth factor is about 4.29, and an Ontario income of $85,000, where the marginal rate is about 29.65%.

  • Retirement rate 22%: the RRSP ends at about $16,738 after tax on withdrawal; the TFSA, funded with $3,518 after tax, ends at about $15,097. The RRSP wins by about $1,642.
  • Retirement rate 29.65%: a dead tie at $15,097. This is the break-even.
  • Retirement rate 30% with an income of $55,000 (marginal rate about 23.15%): the RRSP ends at about $15,022 while the TFSA ends at about $16,492. The TFSA wins by roughly $1,470, because you would pay more tax when you withdraw than you saved when you contributed.
  • Income $140,000 (marginal 43.41%), retirement 30%: the RRSP ends at $15,022 against $12,144 for the TFSA — the RRSP wins by about $2,878.

The pattern is the point: higher earners with lower expected retirement income lean toward the RRSP, and lower earners who expect their income to grow lean toward the TFSA.

Real-world practical application

Use the calculator to settle the allocation of a bonus or tax refund, to test how sensitive the answer is to your retirement rate (the sensitivity table shows results from 10% to 50%), and to see how much a higher income changes the case. Many people reach a practical rule: when your income is low or you expect to earn much more later, fill the TFSA; when you are in a high bracket now and expect lower income in retirement, favour the RRSP, and consider putting the refund into a TFSA. Others find a mix is sensible.

What the model leaves out

Several real-world factors tilt the decision and are not in the arithmetic. RRSP withdrawals count as income and can reduce income-tested benefits such as the Guaranteed Income Supplement, and high retirement income can trigger Old Age Security recovery; TFSA withdrawals do not. TFSA withdrawals also restore contribution room the following year, which makes the TFSA a flexible emergency reserve. RRSP room depends on your earned income (18% of last year’s earned income up to a dollar limit that changes each year), and TFSA room accumulates yearly. Your own numbers matter: check your CRA My Account for current limits rather than relying on a general figure. Spousal RRSPs, the Home Buyers’ Plan and the First Home Savings Account change the picture further for specific goals.

The figures on this page are for the 2026 tax year.

Frequently Asked Questions

Which should I fill first, RRSP or TFSA?

There is no universal answer, but the rule of thumb is to compare your marginal tax rate now with the one you expect in retirement. Higher now means the RRSP deduction is worth more; lower now means the TFSA often wins. The calculator turns that into dollars for your numbers.

Why not just pick the one with the bigger refund?

Because the refund is only half the story. The RRSP defers tax rather than removing it, so withdrawals are taxed later. A large refund is a good sign only if your retirement tax rate will be lower than the rate that produced the refund.

How do I estimate my retirement tax rate?

Add up expected taxable retirement income: CPP, Old Age Security, workplace pensions and RRSP/RRIF withdrawals. Many retirees land in a lower bracket than during their peak earning years, but those with large pensions or savings may not. Test a few rates in the sensitivity table.

Does this work outside Ontario?

Yes. The arithmetic is the same everywhere, only the marginal rate changes. The income-based estimate uses Ontario’s 2026 brackets, so outside Ontario untick it and type your combined federal and provincial marginal rate.

What are the contribution limits?

Both change yearly. The RRSP limit is 18% of the prior year’s earned income up to a dollar cap (the 2026 cap is shown in the calculator), minus pension adjustments, and the TFSA has an annual dollar limit plus unused room from earlier years. Check your CRA My Account for your personal figures.

Related calculators & guides