Should I put money in my RRSP or my TFSA first?
By Reynolds Edokpayi, Zenith Advisory Inc., Saskatoon · Updated October 2026 · 4 min read
The one-line difference
The RRSP gives you a tax break now and taxes you later. The TFSA gives you no tax break now and never taxes you later. Everything else follows from that.
When the RRSP comes first
You earn well now (roughly $100,000 or more as a rough marker) and expect to have less income in retirement. The deduction saves you tax at your high rate today; you pay it back at a lower rate later. The bigger the gap, the better the RRSP.
When the TFSA comes first
- You're new to Canada and have little or no RRSP room yet
- Your income is modest, so the deduction isn't worth much
- You might need the money before retirement (a house, a business, an emergency)
- You expect a pension or other income that will keep your retirement tax rate high
The trap people fall into
Treating the TFSA like a savings account and leaving it in cash. It's an investing account that happens to be tax-free. Money sitting in a TFSA at 1% is wasting the one account where growth is never taxed.
What to do
If you can fill both, fill both. If you can't, the rule of thumb above gets most people to the right answer, and a 30-minute conversation about your actual income gets you the rest of the way.
Want this worked out for your numbers? We'll map where you are, show the gap in dollars, and pick the accounts that save you the most tax.