Question 1

Should I contribute to my RRSP or TFSA first?

Accepted Answer

If your marginal tax rate is above about 30%, the RRSP usually comes first — the tax refund is valuable. Below that, or early in your career, the TFSA often comes first — you keep flexibility and pay no tax on growth. If you have children, an RRSP deduction lowers your AFNI and can increase your CCB.

Question 2

What is the RRSP vs TFSA rule of thumb?

Accepted Answer

The RRSP wins when your tax rate drops in retirement (most high earners). The TFSA wins when your rate stays the same or rises (early career, low income). If unsure, the TFSA is the more flexible choice — you never pay tax on withdrawals.

Question 3

Can I contribute to both an RRSP and a TFSA?

Accepted Answer

Yes. A common strategy is to contribute to the RRSP for the tax refund, then put the refund into the TFSA. In 2026 the TFSA annual limit is $7,000 and the RRSP limit is 18% of prior-year earned income, up to $33,810.

RRSP vs TFSA

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