Which account should get your next dollar? Answer 5 quick questions to find out.
It depends on your tax bracket. If you're in a high bracket now and expect lower income in retirement, RRSP first. If you're in a low bracket or want flexible access, TFSA first. Many Canadians benefit from using both accounts.
The 2025 RRSP contribution limit is 18% of your 2024 earned income, up to a maximum of $32,490. Unused room carries forward from previous years, so check your CRA Notice of Assessment for your exact limit.
The TFSA annual limit for 2025 is $7,000. If you were 18 or older in 2009, your total lifetime room could be up to $102,000 (assuming no contributions made). Unused room also carries forward.
Yes, but withdrawals are added to your taxable income and subject to withholding tax (10-30%). Exceptions: Home Buyers' Plan ($60,000 for first home, repayable over 15 years) and Lifelong Learning Plan ($20,000 for education).
Yes! TFSA withdrawals are completely tax-free and don't count as income. This means they don't affect income-tested benefits like OAS, GIS, or the Canada Child Benefit. The withdrawal amount is added back to your contribution room the following year.
Your RRSP refund equals your contribution × your marginal tax rate. For example, a $10,000 RRSP contribution at a 30% marginal rate gives you a $3,000 tax refund. The key is what you do with that refund — reinvesting it amplifies the RRSP advantage significantly.