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TFSA VS RRSP Thumbnail


Thank you to Angela Hung of financialtechtools.ca for this excellent breakdown between the TFSA and RRSP



So in the Deposit phase, we look at:

  • Contribution Room
  • Carry Forward
  • Contribution
  • Tax Deductibility
  • Tax Treatment of Growth

For 2020:

Contribution Room

TFSA: $6,000 if you never opened a TFSA, you can contribute up to $69,500 today.

  • $5,000 for each year from 2009 to 2012;
  • $5,500 for each of 2013 and 2014;
  • $10,000 for 2015;
  • $5,500 for each of 2016, 2017 and 2019
  • $6,000 for each of 2019 and 2020

RRSP: 18% of your 2020 pre-tax earned income or $27,230. So for example if you earned $60,000, then your deduction limit would be $10,800 (18% x $60,000). If you earned $200,000, then your deduction limit would be capped at the max limit of $27,230.

Carry Forward

TFSA: You can carry forward your unused contribution room indefinitely, as long as your a Canadian resident, older than age 18 with a valid social insurance number. Withdrawals will usually result in new contribution room.

RRSP: You can carry forward your unused contribution room until the age of 71 when you have to convert your RRSP to a RRIF. Any withdrawals made from your RRSP will not result in new contribution room.


TFSA: You are contributing to your TFSA with After-tax dollars.

RRSP: You are contributing to your RRSP with Pre-tax dollars.

Tax Deductibility

TFSA:  Contributions are not tax deductible.

RRSP:  Contributions are tax deductible. (If you’re interested in your tax savings, you should check out our calculator on our 2020 RRSP Campaign post: https://financialtechtools.ca/2020-rrsp-campaign/)

Tax Treatment of Growth

TFSA: The growth inside a TFSA is tax free therefore it’s a great savings vehicle for immediate objectives such as a down payment for a home.

RRSP: The growth inside an RRSP is tax deferred, which means at withdrawal, you will need to pay tax, therefore it’s a good choice for long term goals such as retirement.