RRSP vs TFSA

This calculator provides calculations for two comparative scenarios:

Scenario 1) “Part saved to an RRSP, Part saved to a TFSA” Contributing a specific amount into an RRSP with a seperate amount contributed to a TFSA.

Scenario 2) “All saved to an RRSP” Contributing a specific amount into an RRSP, with the TFSA amount in scenario 1 being contributed into the RRSP instead of the TFSA.

Assumptions matter!

– There are a lot of assumptions in the calculator, particularly with respect to future returns and tax rates. Assumptions tend to compound on themselves, the more assumptions we make the further we stray from expected reality. In this calculator, we’ve made a lot of assumptions. So the calculations may not even reasonably reflect actual values in the future.

  • we’ve assumed 2008 tax rates for all years
  • we’ve assumed a 5000 max. deposit to TFSA’s going forward.
  • max RRSP deposit is set to $20,000. This is an approximation of RRSP maximum deposits and will change in the future.
  • we’ve not indexed TFSA or RRSP deposits
  • we have assumed indexed withdrawals from the TFSA and RRSP’s in the future, over a set number of years. This is likely to be a simplification of reality.
  • 2008 approx values for the age tax credit and OAS have been factored in. GIS has not.