Focused calculator
RRSP vs TFSA Comparison Calculator
Compare the projected long-term after-tax values of RRSP and TFSA contributions under the assumptions entered.
What this calculator compares
This calculator compares simplified long-term RRSP and TFSA after-tax values. It does not verify contribution room, calculate a complete tax return, or recommend either account.
How to use the calculator
Enter the annual base contribution, contribution frequency, number of complete years, return assumption, current marginal tax rate, and future tax rate on RRSP or RRIF withdrawals. Choose the comparison basis, tax-savings treatment, and any employer match.
How the comparison is calculated
- In same-base mode, use the same base contribution for both accounts. If selected, add the estimated RRSP tax saving to RRSP contributions without estimating further savings on that amount.
- In same-out-of-pocket mode, divide the TFSA contribution by one minus the current marginal tax rate. Use the estimated saving once in this gross-up and do not invest it again.
- Calculate employer matching only on the base RRSP contribution, subject to the entered cap.
- Project contributions using the entered frequency and constant annual return assumption.
- Treat TFSA withdrawals as tax-free and apply the entered future RRSP/RRIF withdrawal tax rate to the projected RRSP value.
Contributions are placed at the end of each selected period. Reinvested estimated tax savings enter at the same time. This simplifying assumption does not reproduce when a tax refund is received.
The result is classified as relatively close when the absolute difference is no more than the greater of $250 or 5% of the larger annual TFSA or RRSP base contribution. This display rule does not establish financial equivalence.
Example
Assume an annual TFSA contribution of $6,000, a current marginal tax rate of 30%, a future tax rate of 25% on RRSP or RRIF withdrawals, a 5% annual return, 20 complete years, annual contributions made at year-end, and no employer match. Using the same-out-of-pocket basis, the RRSP contribution is approximately $8,571.43 and $2,571.43 of estimated tax savings is used in the gross-up. The projected TFSA after-tax value is approximately $198,396. The projected RRSP after-tax value is approximately $212,567, an estimated difference of $14,171 in favour of the RRSP.
Assumptions and limits
The projection uses fixed contribution, tax-rate, and return assumptions.
The calculator assumes sufficient RRSP and TFSA contribution room and does not verify eligibility, room, overcontributions, or deduction timing.
One entered current marginal tax rate estimates RRSP tax savings; progressive brackets and a complete return are not modelled.
One future tax rate estimates tax on the RRSP value. Actual tax depends on future withdrawals, income, and rules.
OAS recovery tax, GIS eligibility, FHSA use, inflation, fees, changing returns, investments, estate treatment, and legislative changes are not modelled.
Employer matching can depend on plan formulas, eligible earnings, vesting, payroll timing, and limits. Blank or $0 cap means uncapped only in this illustration.
Access needs and account flexibility affect interpretation but are not numerical inputs.