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RRSP vs TFSA Calculator

Compare an RRSP and a TFSA for the same money out of your pay: the tax refund now, the tax on what you take out in retirement, the OAS clawback, and which leaves you more.

$

A year, before tax

$

A year, from take-home pay

More options· $30,000 other retirement income, 25 years, 4% growth
$

CPP, OAS, pensions; a year

%

A year, after inflation

Leaves you more in retirement

The RRSP

$2,169 a year more after tax, in today’s money

RRSP, after tax
$15,498 a year
TFSA
$13,329 a year

Your RRSP refund saves tax at 31.7% now; in retirement, your withdrawals are taxed at 20.6%.

What this means

For the same $5,000 from your pay, $7,321 can go into an RRSP, because its $2,321 refund covers the rest. The RRSP wins because the tax it saves you now is more than the tax on what you take out later.

A TFSA is also more flexible: you can take money out at any time, tax-free, and put it back the next year. RRSP money is taxed whenever it comes out, except through the Home Buyers’ Plan or Lifelong Learning Plan.

Next step

Side by side

RRSPTFSA
From your pay, a year$5,000$5,000
Goes in, a year$7,321$5,000
Tax refund, a year$2,321 (reinvested)–
At retirement, in 25 years$304,871$208,230
Taken out, a year$19,515$13,329
Tax on it$4,018$0
You keep, a year$15,498$13,329

Each year in retirement

For 25 years, in today’s money
$19,515$9,758$0
RRSPTFSA
You keepTax
Assumptions in this estimate
  • Uses 2026 federal and Ontario tax rules for the refund now and the tax on withdrawals later, with everything in today’s money (growth after inflation).
  • The same amount goes in every year for 25 years, then comes out evenly over 25 years. An RRSP becomes a RRIF by 71, with minimum withdrawals.
  • Not included: the age amount and pension income credit at 65 (which lower the tax on withdrawals a little), and splitting RRSP or RRIF income with a spouse.
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How the calculator works

  1. The same money from your pay goes into each account. In the RRSP, if you reinvest the refund, more goes in, because the refund covers the tax on it.
  2. Growth is after inflation, so every number is in today’s money.
  3. In retirement the money comes out evenly. RRSP withdrawals are taxed on top of your other income (CPP, OAS, pensions), with the OAS clawback; TFSA withdrawals aren’t taxed.
  4. The result is what each leaves you a year, after tax.

Examples

Saving $5,000 a year from take-home pay in Ontario for 25 years, growing 4% a year after inflation, then taking it out over 25 years with $30,000 of other retirement income:

Income now RRSP refund rate Tax on withdrawals RRSP, after tax TFSA Better
$50,000 21.4% 19.9% $13,579 $13,329 Close
$80,000 31.7% 20.6% $15,498 $13,329 RRSP
$120,000 37.6% 20.5% $17,001 $13,329 RRSP

With the refund reinvested, the RRSP wins whenever your refund rate is higher than the tax rate on your withdrawals. At $50,000 the two are close, so the TFSA’s flexibility makes it the easier choice.

By province

The same saver on $80,000:

Province RRSP refund rate RRSP, after tax TFSA
Ontario 31.7% $15,498 $13,329
Quebec 36.1% $15,505 $13,329
Alberta 30.5% $14,959 $13,329
British Columbia 28.2% $14,393 $13,329

What this calculator doesn’t include

The age amount and pension income credit at 65, splitting RRSP or RRIF income with a spouse, the Guaranteed Income Supplement, and taxes or rules that change in the future. RRSPs must become RRIFs by the end of the year you turn 71.

Learn more

Read our guide to RRSP vs TFSA, see your refund with the RRSP tax refund calculator, or plan each one with the RRSP calculator and TFSA calculator.

Last updated

Frequently asked questions

Is an RRSP or a TFSA better?

It depends on your tax rate now and in retirement. If the refund saves you more tax now than you’ll pay on withdrawals later, the RRSP leaves you more. Saving $5,000 a year from take-home pay on $80,000 in Ontario, with the refund reinvested, the RRSP gives about $2,170 a year more in retirement than the TFSA.

What if I spend my RRSP refund?

Then the TFSA usually wins. The RRSP gets the same money as the TFSA, but it’s taxed when it comes out. In the Ontario example, spending the refund turns the RRSP’s $2,170 a year advantage into a TFSA advantage of about $2,690 a year.

Does the OAS clawback matter?

It can. On 2026 income over $95,323, you repay 15% of your Old Age Security on the amount above it. RRSP and RRIF withdrawals count towards that income; TFSA withdrawals don’t. The calculator includes it.

What are the 2026 limits?

RRSP: 18% of your 2025 earned income, up to $33,810, plus any unused room from earlier years (it’s on your notice of assessment). TFSA: $7,000 of new room, plus unused room since 2009 or the year you turned 18.

Should I use both?

Often, yes. Put enough into a group RRSP to get any employer match first, since that’s free money. Then use the RRSP while your tax rate is high, and the TFSA for savings you may need sooner or when your income is lower.

Is a TFSA better on a low income?

Usually. Your RRSP refund is small in the lowest tax bracket, and on a low retirement income RRSP withdrawals can reduce the Guaranteed Income Supplement, while TFSA withdrawals don’t.