RRSP vs TFSA Calculator Canada | After-Tax Comparison

Projected after-tax value

After 25 years, using a 5% annual return.

EstimateRRSP comes out ahead

RRSPAfter withdrawal tax

Gross RRSP contribution$0
Value before withdrawal tax$0
Estimated withdrawal tax$0

TFSATax-free withdrawal

TFSA contribution$0
Value before withdrawal$0
Estimated withdrawal tax$0

RRSP

TFSA

40%

Breakeven withdrawal tax rate

At this rate, both accounts produce the same after-tax result under the model.

Model: TFSA = cash budget × (1 + return)^years. RRSP = [cash budget ÷ (1 − current tax rate)] × (1 + return)^years × (1 − withdrawal tax rate). No fees, inflation, annual contributions, benefit clawbacks, tax-bracket changes during withdrawals, or plan-specific rules are included.

How to read the comparison

Both accounts can shelter investment growth while funds stay inside. The main mathematical difference is when income tax applies: before the money enters a TFSA, or when it leaves an RRSP.

RRSP: deduction now, tax later

Contributions: Deductible contributions can reduce taxable income, subject to your deduction limit.
Growth: Investment income is generally exempt from tax while it remains in the plan.
Withdrawals: Amounts received from the plan are generally taxable income.

TFSA: tax now, no tax later

Contributions: Made with after-tax money and not deductible for income tax purposes.
Growth: Investment income and capital gains are generally tax-free.
Withdrawals: Generally tax-free. Withdrawn amounts are added back to contribution room the following calendar year.

The marginal-rate rule

When the tax savings from an RRSP contribution are fully invested and both accounts hold the same investments for the same time, the tax-rate comparison drives the result.

Lower rate laterRRSP has the higher after-tax value.

Same rate laterThe math ties; TFSA may still win on flexibility, including tax-free withdrawals and room restored the following year.

Higher rate laterTFSA has the higher after-tax value.

Contribution room basics

Check your own limit

Your RRSP deduction limit and TFSA room are personal. Confirm them through CRA records and your own transaction history before contributing.

Unused room can carry forward

Unused TFSA contribution room carries forward. RRSP deduction room can also carry forward, but pension adjustments and other factors can affect the amount.

TFSA withdrawals do not restore room immediately

A TFSA withdrawal is added back to room on January 1 of the next calendar year. Re-contributing too soon can create an over-contribution.

RRSP room is not restored by ordinary withdrawals

Unlike a TFSA withdrawal, a normal RRSP withdrawal does not give the contribution room back.

Common misconceptions

“The RRSP refund is free money.”It is the result of a tax deduction. RRSP withdrawals are generally taxable later.
“A TFSA is only a savings account.”A TFSA is a registered account type; it can hold eligible investments, not just cash.
“Withholding tax is the final RRSP tax.”Withholding is a prepayment. Your final tax depends on your total income and tax return for the year.
“The higher projected balance always means the better account.”RRSP balances are pre-tax. Compare spendable, after-tax dollars and consider flexibility.

Frequently asked questions

Is an RRSP always better if I get a tax refund?

No. The refund reflects tax deferred today, not a separate investment return. If you spend the refund instead of investing it, the RRSP comparison is less favourable. The tax rate when you withdraw also matters.

Why does this calculator gross up the RRSP contribution?

It compares an equal after-tax cash cost. A deductible RRSP contribution can be larger than a TFSA contribution funded by the same after-tax budget when the associated tax savings are invested. You still need enough RRSP contribution room.

What happens if my tax rate is the same now and in retirement?

Under this simplified model—with equal returns, the RRSP tax savings fully invested, and no other tax effects—the after-tax RRSP and TFSA outcomes are equal. A TFSA may still offer more withdrawal flexibility.

Does a TFSA withdrawal affect income-tested benefits?

TFSA withdrawals are generally tax-free and are not reported as taxable income. RRSP withdrawals are generally taxable income and may affect income-tested benefits or credits. This calculator does not model those interactions.

Can I contribute the calculator's gross RRSP amount?

Only if you have enough available RRSP contribution room. Check your latest notice of assessment or CRA records. Over-contributions can lead to tax.

Does the calculator include investment fees or inflation?

No. It uses a constant nominal annual return and does not subtract fees or adjust the result for inflation. Use the same net-of-fee return for both accounts if the investments and costs are comparable.

Official sources

Accessed October 4, 2026. Tax rules can change; confirm current rules with the CRA.