RRSP vs TFSA Calculator
Compare the after-tax value of the same pre-tax dollars in an RRSP (deduct now, taxed on withdrawal) or a TFSA (after-tax in, tax-free out).
RRSP vs TFSA: RRSP contributions are deductible and taxed on withdrawal; TFSA contributions come from after-tax money and grow tax-free. RRSP = C × (1 + r)n × (1 − tax later); TFSA = C × (1 − tax now) × (1 + r)n.
2026 CRA limits: TFSA dollar limit $7,000; RRSP dollar limit $33,810, with your deduction limit generally the lesser of 18% of last year’s earned income and that amount, plus unused room (CRA limits table, CRA TFSA room, checked 19 October 2026).
Example: $7,000 pre-tax for 25 years at an assumed 6%, 40% tax now and 30% later: the RRSP nets $21,030.17, the TFSA $18,025.86, so the RRSP is $3,004.31 ahead.
US version: Roth vs traditional IRA calculator.
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Use your actual figures where available. The output is an educational estimate based on the assumptions below.
Displayed amounts are rounded to two decimal places. Keep the same currency and time period across related inputs.
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2026 limits (Canada Revenue Agency)
- TFSA dollar limit: $7,000 for 2026, added on 1 January. Unused room carries forward, and withdrawals are added back the following year.
- RRSP dollar limit: $33,810 for 2026. Your deduction limit is generally the lesser of 18% of the previous year's earned income and this dollar limit, minus pension adjustments, plus unused room.
An RRSP contribution is deducted from taxable income, so it saves tax at your marginal rate now. Withdrawals are taxed as income. A TFSA uses after-tax money, and withdrawals are tax-free. With the same tax rate now and later, the two give the same result. The account taxed at the lower rate wins.
TFSA = C × (1 − tnow) × (1 + r)n
Worked example: $7,000 for 25 years, 40% now vs 30% later
Setting aside $7,000 of pre-tax income for 25 years at an assumed 6%, with a 40% marginal rate now and 30% on withdrawal: the RRSP grows to $30,043.10 and is worth $21,030.17 after tax. The TFSA receives $4,200 after tax and grows to $18,025.86. The RRSP comes out $3,004.31 ahead. This assumes the RRSP tax refund is invested too, which is what "the same pre-tax dollars" means.
What the comparison leaves out
- Income-tested benefits such as OAS and GIS, which RRSP/RRIF withdrawals can reduce but TFSA withdrawals do not.
- The Home Buyers' Plan and Lifelong Learning Plan, which let you borrow from an RRSP.
- Employer RRSP matching, which usually tips the balance toward the RRSP.
Sources
- Canada.ca: RRSP and TFSA dollar limits: 2026 RRSP $33,810, TFSA $7,000
- Canada.ca: RRSP deduction limit
Related calculators
- Roth vs Traditional IRA calculator: the US version of this trade-off
- Mortgage affordability (US): price from income with the 28/36 rule
- 401(k) calculator: retirement balance with an employer match
- Roth vs Traditional IRA: tax now or tax later
Dated figures on this page are tracked in the figures update log.
Frequently asked questions
What is the TFSA limit for 2026?
$7,000, according to the Canada Revenue Agency. Unused room from earlier years carries forward.
What is the RRSP limit for 2026?
The RRSP dollar limit is $33,810. Your personal deduction limit is generally the lesser of 18% of last year's earned income and that amount, adjusted for pension adjustments and unused room.
Is an RRSP or a TFSA better?
If you expect a lower tax rate when you withdraw, the RRSP tends to win; if you expect a higher or equal rate, the TFSA is equal or better, and more flexible.
Do TFSA withdrawals affect government benefits?
TFSA withdrawals are not taxable income, so they do not reduce income-tested benefits. RRSP and RRIF withdrawals are taxable income.
Should I choose an RRSP or a TFSA?
Compare your tax rate now with your expected rate on withdrawal. A higher rate now favours the RRSP; a higher or equal rate later favours the TFSA, which also keeps withdrawals tax-free.
Does unused TFSA room carry forward?
Yes. According to the CRA, your room is the current year’s dollar limit plus unused room from previous years, and withdrawals are added back on 1 January of the following year.
Worked example: $7,000 in an RRSP or a TFSA?
At a 30% marginal rate, a $7,000 RRSP contribution can create about $2,100 of tax refund, but withdrawals are taxed later. The same $7,000 fills the 2026 TFSA dollar limit, with no refund now and tax-free withdrawals.
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