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TFSA vs RRSP Calculator
Compares the after-tax value of contributing the same out-of-pocket amount each year. The RRSP option assumes your tax refund is reinvested. Marginal rates use 2025 Alberta combined federal + provincial brackets. For planning purposes — consult your accountant.
More Money After Tax
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TFSA
RRSP
How the TFSA vs RRSP Decision Works
Both accounts shelter your investment growth from tax. The difference is when you pay tax. With an RRSP you deduct contributions today and pay tax on withdrawals later. With a TFSA you contribute after-tax dollars but never pay tax again.
The One Rule That Decides It
- RRSP wins when your tax rate in retirement is lower than today
- TFSA wins when your retirement rate is the same or higher
- They tie when the two rates are identical — assuming you reinvest the RRSP refund
Why the Refund Matters
An RRSP only beats a TFSA if you reinvest the tax refund it generates. This calculator grosses up the RRSP contribution so the same out-of-pocket cash funds a larger pre-tax deposit — the apples-to-apples comparison. Spend the refund instead, and the RRSP edge disappears.
Beyond the Math
- TFSA withdrawals don't count as income — they won't trigger OAS or GIS clawback
- RRSPs become RRIFs at 71 with forced minimum withdrawals
- TFSA contribution room is restored the year after a withdrawal
- RRSP room is 18% of earned income (up to an annual cap)
Most Canadians Should Use Both
The accounts complement each other. The optimal split depends on your full picture — income trajectory, pension, CPP/OAS timing, and estate goals. A Swift Accounting advisor can model the exact numbers for you.