RRSP vs TFSA - Which Is Better for You?

It depends on your income now vs your income in retirement. RRSP gives you a tax break today. You contribute pre-tax dollars, your taxable income drops, and you get a refund. But you pay tax when you withdraw - ideally in retirement when your income (and tax rate) is lower. TFSA gives you tax-free growth forever. You contribute after-tax dollars (no upfront deduction), but everything you earn inside - interest, dividends, capital gains - is never taxed. Withdrawals are completely tax-free. If your income is high now and you expect it to be lower in retirement, an RRSP is powerful. You get a deduction at a high tax rate and pay tax later at a lower rate. If your income is lower now (students, early career, part-time workers), a TFSA is usually better. TFSA withdrawals don't affect government benefits like the GST/HST credit or Canada Child Benefit. Absolutely. Many Canadians contribute to both. A common strategy: use your RRSP for the tax deduction, then put the refund into your TFSA. For 2025, the RRSP contribution limit is the lesser of 18% of your 2024 earned income or $32,490. For 2026, that cap rises to $33,810.