Calculators > TFSA vs
RRSP calculator information page
Our Tax-Free Savings Account (TFSA) vs Registered
Retirement Savings Plan (RRSP) calculator will help you decide which type of
account is better for you. This will depend on your current age, annual income now
and after retirement, province of residence, as well as other factors.
The calculator uses two scenarios - deposits going to
RRSPs, and deposits going to TFSAs. You input how much you would
deposit into an RRSP, and the calculator determines the after-tax amount
of that deposit, which is used as your TFSA deposit. You also input
when you would like to convert to a RRIF, and if you would like to start
withdrawing from your RRSP before it is converted to a RRIF. Once
these withdrawals are started, the TFSA scenario uses the RRSP/RRIF
withdrawal, less tax on that withdrawal, as the TFSA withdrawal.
The balances of pre-existing RRSPs/RRIFs or TFSAs are
not entered into this calculator. Instead, the calculator requires
you to input your estimated annual income, including withdrawals from
already existing RRSPs, RRIFs or TFSAs, at the time that you start your
withdrawals. You can use our RRIF
calculator or RRSP/RRIF calculator
to determine the estimated annual minimum withdrawals from any RRSPs or
RRIFs that you already have.
Tax rates used are 2010 rates known as of January 19,
2010.
The calculator will show any clawback of Old Age
Security (OAS), as well as any Guaranteed Income Supplement (GIS) to which
you may be entitled.
The result of the calculations is that the net
disposable income (cash in your pocket after tax) is exactly the same in
both the RRSP and TFSA scenarios, until the balance of either one is
reduced to zero, unless GIS supplements are received.
See our article on TFSAs, as well as the
section comparing TFSAs to RRSPs.
For information on many of the factors used in the
calculator, see the following articles:
