RRSP vs TFSA Calculator 2026
Compare the same savings in an RRSP or a TFSA and see which leaves you more after tax, using 2026 Alberta tax rates.
Result
The RRSP leaves you $200.70 more
Tax rate now 23.2% · in retirement 22%
| RRSP | TFSA | |
|---|---|---|
| You put in | $5,000.00 | $3,840.73 |
| Tax saved now | $1,159.27 | — |
| Value when you withdraw | $16,931.77 | $13,006.08 |
| Tax on withdrawal | −$3,724.99 | $0.00 |
| You keep | $13,206.78 | $13,006.08 |
Calculated in your browser. Your numbers never leave your device.
How this is calculated
- RRSP: the full amount goes in. It grows at your yearly return, and when you withdraw it, it’s taxed at your tax rate in retirement.
- TFSA: you pay tax on the amount first, at your tax rate now, and put in what’s left. It grows at the same return and comes out tax-free.
- Tax rate now is the tax an RRSP deduction actually saves you, worked out with our Alberta income tax calculator with and without the deduction.
- Tax rate in retirement is the combined federal and Alberta rate on the next dollar of income at your retirement income, using 2026 brackets.
Both options cost you the same out of pocket today: the RRSP’s tax savings make up the difference. That’s why the winner depends only on the two tax rates, not on the return or the number of years. Those change how much you end up with, but not which account wins.
RRSP or TFSA by income
Difference in what you keep from $5,000 saved for 25 years at 5% a year. Rows are your income now; columns are your income in retirement.
| Income now, by retirement income | $30,000 | $50,000 | $80,000 |
|---|---|---|---|
| $50,000 | Same | Same | TFSA +$1,439 |
| $80,000 | RRSP +$1,439 | RRSP +$1,439 | Same |
| $120,000 | RRSP +$1,781 | RRSP +$1,781 | RRSP +$342 |
The RRSP wins most clearly when you earn a lot now and expect much less later: $120,000 now and $30,000 in retirement saves 32.5% going in and costs 22% coming out. The TFSA wins when the reverse is true.
Worked example
You earn $60,000, want to save $5,000 of it, expect $40,000 of income in retirement, and invest for 25 years at 5% a year.
- RRSP: $5,000 goes in and saves you $1,159.27 in tax now (23.2%). It grows to $16,931.77; tax at 22% takes $3,724.99, leaving $13,206.78.
- TFSA: after tax, $3,840.73 goes in. It grows to $13,006.08, all of which you keep.
The RRSP leaves you $200.70 more, because your tax rate in retirement (22%) is lower than the rate the RRSP saves you now (23.2%). With $50,000 now and $80,000 in retirement, it flips: the tfsa leaves you $1,439.20 more.
What this calculator assumes
- You live in Alberta, now and in retirement, and today’s income is employment income.
- You have room in both accounts, and you invest the RRSP tax savings rather than spend them.
- The return is the same every year and the same in both accounts.
- Tax rates are 2026 rates. The retirement rate doesn’t include the age amount, pension income credit, or the Old Age Security recovery tax, which can raise the real rate on RRSP withdrawals for some seniors.
- It doesn’t include the effect of RRSP withdrawals on income-tested benefits such as the GIS.
Frequently asked questions
Is an RRSP or a TFSA better?
It mostly comes down to one thing: is your tax rate higher now or when you'll take the money out? If it's higher now, the RRSP wins, because you save tax at a high rate and pay it back at a lower one. If it's higher later, the TFSA wins. If it's the same, they come out equal, as long as you invest the RRSP tax savings.
What if I spend my RRSP tax refund instead of investing it?
Then the TFSA usually comes out ahead. This comparison assumes the RRSP's tax savings stay invested, which is what makes the two cost the same out of pocket. Putting your refund into your TFSA or next year's RRSP keeps the comparison fair.
How much can I put in a TFSA in 2026?
The 2026 TFSA limit is $7,000. Unused room carries forward, so someone who was 18 or older and living in Canada every year since TFSAs began in 2009 has $109,000 of total room in 2026, minus anything they've contributed. Withdrawals are added back to your room on January 1 of the next year.
How much can I put in an RRSP in 2026?
Your 2026 RRSP room is 18% of your 2025 earned income, up to $33,810, plus any unused room, minus pension adjustments. Your exact limit is on your notice of assessment. Our RRSP calculator shows how much tax a contribution saves.
Do RRSP or TFSA withdrawals affect OAS and GIS?
RRSP and RRIF withdrawals count as income, so they can reduce income-tested benefits like the Guaranteed Income Supplement and, at higher incomes, Old Age Security. TFSA withdrawals are not income, so they don’t. That can tip the balance toward a TFSA for people who expect a low income in retirement.
Can I have both an RRSP and a TFSA?
Yes, and many people use both. A common approach is to use the RRSP while your income is high and the TFSA when it's lower or for money you might need before retirement, since TFSA withdrawals are tax-free and the room comes back the next year.
Rates for tax year 2026 · Last updated