How to max both RRSP and TFSA in the same year

You've got $40,000 sitting in your chequing account and room in both your RRSP and TFSA. The temptation is to split it evenly. Don't.

The right order is RRSP first, TFSA second. Here's why: the RRSP gives you a tax refund that you can immediately put toward your TFSA. Do it backwards and you miss free money.

The math on maxing both accounts

Say you're earning $80,000 in Ontario. Your 2025 RRSP limit is probably around $14,400 (18% of last year's earned income). Your TFSA has $7,000 of new room this year.

Put $14,400 into your RRSP first. At that income in Ontario, you're in roughly a 31.5% marginal tax bracket. So that RRSP contribution gets you about $4,500 back when you file your taxes.

Now you've got your original $40,000 minus $14,400, plus $4,500 back from the CRA. That's $30,100 left - more than enough to max your TFSA at $7,000 and still have over $23,000 for other priorities.

If you'd done TFSA first, you'd put in $7,000, then $14,400 into your RRSP, and still get the same $4,500 refund. But now you're sitting on that refund without a clear tax-advantaged place to put it, since your TFSA is already maxed.

The refund timing problem

The catch is timing. You won't see that RRSP refund until you file your tax return - so February at the earliest if you're filing right when tax season opens.

If you need to max both accounts by December 31st for this tax year, you need enough cash upfront to cover both contributions. The refund strategy works better when you're thinking across tax years: max your RRSP early in 2025, get the refund when you file, then use it to help max your 2026 TFSA room.

Some people get around this by adjusting their payroll deductions. If you tell your employer you're contributing to an RRSP, they can reduce the tax they withhold from each paycheque. You get the tax savings immediately instead of waiting for a refund. But this requires paperwork and cooperation from payroll - not everyone wants to bother.

When TFSA first makes sense

There are times to flip the order. If you're earning under $50,000, the RRSP refund is smaller - maybe 20.5% federally plus provincial rates. A TFSA might make more sense as your primary account anyway, since your tax rate now is probably similar to what it'll be in retirement.

Or if you think you might need the money before retirement. TFSA withdrawals don't create taxes or penalties. RRSP withdrawals get taxed as income, and you lose that contribution room forever.

The ideal scenario is having enough cash to max both accounts regardless of order, then using the RRSP refund for next year's contributions or other financial goals. TaxSplit.ca will show you exactly how much that refund will be based on your income and province.

Max your RRSP by February 29th for the current tax year. Max your TFSA by December 31st. Get the refund. Repeat.