Maximizing Retirement Savings: Comparing TFSA and RRSP

Canadians planning for retirement have options with Equitable® outside of a standard taxable savings account, including the Tax-Free Savings Account (TFSA) and the Registered Retirement Savings Plan (RRSP). Both accounts offer tax benefits and can help grow savings though investments in a full range of funds and guaranteed interest options.

While both are useful, there are key differences. When should you choose a RRSP, and when a TFSA? Let's break down the differences:

TFSA

• Contributions are not tax-deductible.
• Investment gains are tax-free.
• Withdrawals are tax-free.
• Annual contribution limits are indexed to inflation and not based on income.
• Limits include unused contribution room from previous years.

RRSP

• Contributions are tax-deductible.
• Investment gains are tax-free.
• Money is taxed only when withdrawn.
• Annual contribution limits are based on income plus unused contribution room from previous years.
• The limit is 18% of the previous year's income or the annual RRSP limit ($32,490 for 2025), whichever is less.

To get a sense of how much you can save for retirement with a taxable savings account compared to a TFSA and RRSP, check out our TFSA Comparison calculator.

Need help deciding which savings vehicle is right for you? Contact your advisor today.