Est. Tax Refund
$0
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Final RRSP Balance
$0
Pre-tax growth
Balance Over Time
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What is the RRSP Tax Savings Calculator?
The Registered Retirement Savings Plan (RRSP) is a tax-deferred investment account. Contributions you make to an RRSP are deducted from your gross income, lowering your tax bill for the current year (often generating a tax refund). The investments grow tax-free, but all withdrawals in retirement are taxed as regular income. The goal is to contribute when you are in a high tax bracket and withdraw in retirement when you are in a lower tax bracket.
How to Use This Tool
- Gross Income: Your total income before taxes. This determines your marginal tax bracket.
- RRSP Contribution: The amount you plan to deposit.
- Province: Tax brackets vary wildly by province. Select your province for accurate marginal tax calculations.
Frequently Asked Questions
Should I max out my TFSA or RRSP first?
As a general rule of thumb, if you earn less than $60,000 to $70,000, max out your TFSA first. If you earn over $90,000, prioritize your RRSP to get the massive tax deduction, and reinvest the tax refund into your TFSA.
What should I do with my RRSP tax refund?
Reinvest it! The RRSP tax deduction is a deferral, not free money. You will owe taxes on the withdrawals later. Reinvesting the refund ensures your portfolio grows large enough to cover that future tax bill.