RRSP vs TFSA — Which Is Better for You?
Compare Registered Retirement Savings Plans (RRSP) and Tax-Free Savings Accounts (TFSA). Understand contribution limits, tax benefits, and when to use each.
Key Differences
| Feature | RRSP | TFSA |
|---|---|---|
| 2025 Contribution Limit | 18% of income (max $32,490) | $7,000 |
| Tax on Contributions | Tax-deductible | After-tax dollars |
| Tax on Withdrawals | Taxed as income | Tax-free |
| Best For | Higher earners, retirement | Flexible savings, lower earners |
If you're in a high tax bracket now and expect to be in a lower one in retirement, the RRSP is usually better. If your income is lower now, the TFSA may be the better choice.