RRSP vs TFSA at $100k: Why the RRSP wins by $1,600

At $100,000 in Ontario, every dollar you put into an RRSP saves you 31.5 cents in taxes. That's $3,150 back on a $10,000 contribution - money you can invest or use however you want.

Put that same $10,000 in a TFSA and you get nothing back today. The growth is tax-free later, but there's no immediate refund.

The math here isn't close. The RRSP wins.

Why $100k changes everything

Below $60,000, the TFSA usually makes sense. Your tax rate is low enough that the RRSP refund doesn't justify giving up tax-free withdrawals forever.

At $100,000 in Ontario, your marginal rate hits 31.5% - combining the 20.5% federal rate with Ontario's 11.16% provincial rate. That means the government is essentially paying you 31.5% of your RRSP contribution upfront.

Here's what that looks like: contribute $15,000 to your RRSP and you'll see roughly $4,725 extra on your tax refund. TaxSplit.ca will show you the exact number based on your other deductions.

The TFSA catch everyone misses

TFSA room doesn't disappear. If you skip it this year to prioritize your RRSP, that $7,000 contribution room carries forward forever. You can use it next year, or in five years, or when you retire.

RRSP room works the same way, but there's a deadline pressure the TFSA doesn't have. You lose RRSP room permanently at age 71. TFSA room never expires.

This is why financial advisors often say "RRSP first" at higher incomes. You're not actually choosing between the accounts long-term - you're choosing which one to fill first.

What to do with the refund

The RRSP only wins if you invest the tax refund. Spend it on vacation and the TFSA starts looking better.

At $100k, your RRSP refund should be around $3,000-$4,000 depending on how much you contribute. Put that refund into your TFSA and you're essentially getting the best of both accounts.

That's the real advantage at this income level. The RRSP refund is large enough to make a meaningful dent in your TFSA room. Someone earning $40k might get a $600 refund - nice, but not enough to change the strategy.

The one case where TFSA wins

If you think you'll need the money before retirement, TFSA wins even at $100k. You can withdraw TFSA funds anytime with no penalty. Withdraw from your RRSP early and you'll pay withholding tax plus lose that contribution room forever.

But if this is genuinely long-term retirement money, the immediate tax break makes the RRSP the obvious choice.

At $100k in Ontario: RRSP first, invest the refund in your TFSA, then continue filling whichever account has room.