RRSP or TFSA?
Understand the difference.
See what an RRSP saves you in tax, then compare the two accounts side by side to make an informed decision.
RRSP and TFSA
Understand the difference and see what each account can earn you.
Duration: how many years you plan to contribute this amount. Return: 5% is a cautious long-term assumption — leave it as is if you are not sure.
The TFSA gives no tax refund: you contribute with money that is already taxed.
2 · RRSP AND TFSA SIDE BY SIDE- Tax refund now: $1,413/yr
- Tax-sheltered growth
- Withdrawals are taxable (often in retirement)
- No tax refund today
- Tax-sheltered growth
- Withdrawals are tax-free, at any time
Your tax on your last dollars earned is about 28% today. The key question: do you expect to pay less tax in retirement than today?
If so, the RRSP usually gives you more back in the end. If you are not sure, or if you want to keep your money accessible, the TFSA is the flexible choice. Every situation is different: Finoutil informs you, but does not replace a professional for an important decision.
The RRSP defers tax: the contribution and its growth are sheltered, then withdrawals are taxable. The TFSA offers no deduction, but every withdrawal is tax-free. Educational estimate — your contribution room is not verified.
What this calculation is based on: sources and method
What this calculation includes
- Estimated tax savings at your marginal rate (2026 brackets)
- Real effort: contribution minus the tax refund
- Side-by-side growth projection for the RRSP and TFSA
Doesn't account for: your RRSP contribution room (18% of income) and TFSA room · the real return on investments, which is never guaranteed.
Official sources
- Revenu Québec income tax brackets and source deductions (TP-1015.F), 2026
- Retraite Québec QPP and QPP2 contributions, 2026
- QPIP 2026 contribution rates
- Canada Revenue Agency federal tax and guide T4127, 2026
- CFFP — Université de Sherbrooke parameters of the Québec tax system
An educational projection
This estimate doesn't check your contribution room. Returns aren't guaranteed, and the RRSP value shown is before any tax that may apply on withdrawal. Check your notices of assessment and, if needed, consult a professional.
Go deeper: our guide “RRSP or TFSA in 2026”.
Frequently asked questions
RRSP or TFSA: what's the difference?
An RRSP gives you a tax deduction today, but withdrawals are taxable later. A TFSA offers no deduction, but withdrawals are tax-free. The key question: will you pay less tax in retirement than you do today? If so, the RRSP is often the better deal. If not, or if you want to keep your money accessible, the TFSA is often the better choice. Consult a professional if needed.
How much tax does an RRSP save?
The savings depend on your marginal tax rate. In Québec, it ranges from about 26% to 53% depending on income. A contribution lowers your taxable income: for example, at a marginal rate of 37%, contributing $5,000 lowers your tax by about $1,850. The tool calculates your real savings based on your exact income.
Does an RRSP eliminate tax?
No, it defers it. The contribution and its growth are sheltered from tax as long as they stay in the account, but withdrawals (often in retirement) are taxable. The TFSA, on the other hand, offers no deduction, but all withdrawals are tax-free.
Does a TFSA affect my government benefits?
No. TFSA withdrawals don't count as taxable income and don't affect income-tested benefits (such as Old Age Security or the Guaranteed Income Supplement). RRSP withdrawals, on the other hand, increase your taxable income.
Does the tool check my contribution room?
No. The projection is educational and doesn't check your RRSP contribution room (18% of earned income, up to an annual maximum) or your accumulated TFSA room. Check your notice of assessment from the Canada Revenue Agency for your exact amounts.