RRSP and TFSA comparison

Main purpose

Meets your savings needs throughout your life (not only after retirement)

Mainly meets retirement needs.

Tax treatment

Both savings vehicles offer tax advantages
but there are some minor differences between them

Eligibility TFSA RRSP
Minimum age



Maximum age



Maturity date (termination)


December 31 of the year in which you turn 71 years of age1

Contribution Room TFSA RRSP
Annual contribution limit $5,000 (2009)
$5,000 (2010)
$5,000 (2011)
$5,000 (2012)
$5,500 (2013)
$5,500 (2014)
$10,000 (2015)
$5,500 (2016)
$5,500 (2017)


$21,000 (2009)
$22,000 (2010)
$22,450 (2011)
$22,970 (2012)
$23,820 (2013)
$24,270 (2014)
$24,930 (2015)
$25,370 (2016)
$26,010 (2017)

* Based on earned income and participation in a retirement plan (maximum amount will be indexed annually thereafter).

Contribution limit as
a % of earned income

No matter how much you earn, the contribution limit is $5,000.

18% of earned income
(Subject to the annual contribution limit)

Excess contributions

Penalty of 1% per month

Penalty of 1% per month (Up to $2,000 in excess contributions are allowed without penalty)

Unused contribution room carried forward

From year to year

From year to year

Contribution room restored after withdrawals

Starting the following year

Contribution limit indexed?

According to the Consumer Price index (CPI), rounded to the nearest $500

Based on the increase in the Average Industrial Wage (AIW)

Spousal contributions?

No, but one spouse can give the other spouse the funds needed for his/her contribution
without being subject to
income attribution rules3

Transfer to spouse in the event of relationship breakdown / death?

Without affecting
contribution room

Without affecting
contribution room

Tax rules TFSA RRSP
Tax deductible contributions?

TFSA contributions cannot be deducted from income.

Taxable income
Withdrawals taxable ?

You can withdraw2 funds from your TFSA at any time for any purpose without having to pay tax on the withdrawals.

You can withdraw2 funds from your RRSP at any time for any purpose but you have to pay tax on the withdrawals.

Minimum withdrawal

After you convert your
RRSP into a RRIF.

Impact on income-tested government retirement benefits and tax credits
(clawback of Old Age Security and Guaranteed Income Supplement)

Does not reduce benefits or tax credits.

May reduce benefits and tax credits

Tax impact in the event of death

If transferred to the spouse. The value of the TFSA is never taxable.

- If the TFSA is left to a person other than your spouse, the TFSA will be terminated and the investments will become non-registered assets.
- The income generated by those non-registered assets will be taxable.

If rolled over to the spouse

For further information

RRSPs and taxes

RRSP, TFSA and taxes

No one likes to pay taxes. Fortunately, a number of investment strategies exist to help you reduce your tax burden, or even obtain a tax return! Learn how to use these to your advantage.
Planning your retirement

Planning Your Retirement

Whether you are on the eve of retirement, in your early thirties, or still in school, you can be sure of one thing: you need to think about retirement. And more importantly, you need to take the time to determine your dreams and aspirations.
At retirement

Once You've Retired

You've saved your entire life for your retirement and now's the time has come to enjoy it! How can you convert your various investments into retirement income while reducing what you pay in taxes?



1 You have to withdraw the amount accumulated in your RRSP and invest it in a Registered Retirement Income Fund (RRIF) before December 31 st of the year in which you turn 71.
2 Subject to the terms and conditions of the selected investments.
3 Attribution rules are income tax provisions that apply to an individual who transfers assets to a third party. Under these rules, income earned on the transferred assets has to be included in the individual's own income