RRSP vs TFSA in Ontario
For Ontario residents at $95,000 income contributing $6,000/year for 30 years at 6% return, the break-even retirement marginal rate is 30.0% — below that, RRSP wins; above, TFSA.
Best choice for your inputs
RRSP wins by $23,717
Current marginal rate 30.0% vs estimated retirement 25.0%.
Your current marginal rate (30.0%) is higher than your estimated retirement marginal rate (25.0%). The RRSP deduction is worth more now than the eventual withdrawal tax.
Your Situation
Projected after-tax balance over 30 years
| RRSP | TFSA | |
|---|---|---|
| Ending balance | $474,349 | $474,349 |
| Refund reinvested (side TFSA) | $142,305 | — |
| Withdrawal tax @ 25% | −$118,587 | $0 |
| Net after-tax | $498,067 | $474,349 |
Break-even retirement marginal rate
With refund reinvestment, RRSP and TFSA produce identical net outcomes when your retirement marginal rate equals your current marginal rate of 30.0%. Below that, RRSP wins; above it, TFSA wins.
Ontario-specific context
Ontario's combined federal + provincial top marginal rate is 53.53% (33% federal + 20.53% Ontario surtax-adjusted), and the provincial bracket structure means earners between $55k and $112k face a 29.65% combined marginal rate. RRSP contributions in this band are particularly powerful when retirement income is expected to fall in the lowest two brackets (~20% combined). Ontario's TFSA contribution room is the same nationally — $7,000 for 2026 — but the higher marginal rate on Ontario salaries makes the RRSP refund larger in dollar terms than in low-rate provinces. The Ontario Health Premium (OHP) does not apply to RRSP withdrawals before age 65 in the same way as for employment income, modestly favouring RRSP-funded early retirement here.
Worked example: $95,000 income, $6,000/year
- Current combined marginal rate: 30.00%
- Annual RRSP refund (reinvested): $1,800
- RRSP ending balance after 30 years (before tax): $474,349
- RRSP withdrawal tax @ 25%: −$118,587
- RRSP net (with reinvested refund): $498,067
- TFSA ending balance after 30 years (tax-free): $474,349
- Verdict: RRSP wins by $23,717
Related Ontario calculators
Other Provinces
Reflects 2026 tax year rates.