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TFSA or RRSP? A side-by-side calculator

Compare what the same pre-tax dollars become in a TFSA and an RRSP, using your tax rate now and your tax rate when you take the money out.

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Advantage

RRSP ahead
$0
TFSA after-tax
$0
RRSP after-tax
$0

At a 40% rate today and 25% at withdrawal, growing at 4.5% after fees, the RRSP keeps about $4,508 more after tax.

TFSA vs RRSP over time

TFSA (after-tax)RRSP (after-tax)

At a 40% rate today and 25% at withdrawal, the RRSP keeps about $4,508 more after tax. A lower future rate rewards deferring the tax.

Show assumptions

Both paths begin with the same pre-tax dollars and the RRSP's up-front refund is assumed re-invested — the apples-to-apples comparison. The same return after fees applies to both accounts, and marginal rates are held constant within each phase.

Return 5.2 % a year before fees, fees 0.7 %, so 4.5 % a year after fees — constant every year; real returns vary.

Reference: FP Canada / IFP Projection Assumption Guidelines 2026 (before fees).

Hypothetical illustration — not a projection of any specific product. Past returns don't predict future returns.

Does not model OAS clawback, contribution room, or provincial specifics. Directional illustration, not tax advice.

Illustrative and educational only — not financial, tax, or legal advice, and not a guarantee. Returns are not guaranteed. Verify all figures against current rules and actual product illustrations.

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The one question that decides it

A TFSA and an RRSP grow the same way. The difference is when you pay tax. With an RRSP you get a deduction now and pay tax when you withdraw. With a TFSA you contribute money that has already been taxed, and withdrawals are tax-free.

So the comparison comes down to two tax rates: your marginal rate today and your marginal rate when you take the money out. If today's rate is higher, the RRSP usually wins. If the later rate is higher, the TFSA usually wins. If they are the same, the two end up equal — as long as the RRSP refund is invested too.

What this calculator shows

Enter a pre-tax amount, your marginal rate now, your expected marginal rate at withdrawal, and the number of years. The calculator shows what each account is worth after tax at the end, the advantage of the better one, and a chart of both over time.

Returns use the FP Canada 2026 projection guidelines and are shown after fees: Cautious 3.2 %, Balanced 4.5 %, Growth 5.1 % a year. You can change the return and the fee; a higher figure is an optimistic scenario, not a forecast.

The 2026 limits

TFSA room for 2026 is $7,000. Someone who was 18 or older and resident in Canada in 2009 and has never contributed has $109,000 of room in total. RRSP room is 18 % of last year's earned income, up to $33,810, minus any pension adjustment — your notice of assessment shows your exact figure.

Benefits that depend on income, such as Old Age Security and the Guaranteed Income Supplement, can also change the answer, because RRSP withdrawals count as income and TFSA withdrawals do not.

A quick example

Take $1,000 of pre-tax income and a 30 % marginal rate. In the RRSP the whole $1,000 is invested, because the deduction gives the tax back. In the TFSA, $700 is invested after tax. If the rate at withdrawal is also 30 %, both end up the same after tax. If it is 20 %, the RRSP keeps more; if it is 40 %, the TFSA does.

Common questions

Is a TFSA better than an RRSP?

Neither is better in general. If your tax rate is higher now than it will be when you withdraw, the RRSP usually comes out ahead; if it will be higher later, the TFSA usually does.

How much TFSA room do I have?

$7,000 for 2026, and $109,000 in total if you were 18+ and resident since 2009 and have never contributed. Withdrawals are added back to your room the next year.

What is the RRSP limit for this year?

18 % of last year's earned income, up to $33,810, plus any unused room carried forward. Your notice of assessment shows your exact limit.

Educational illustration, not advice. Talk to a licensed advisor about your situation.