RRSP vs TFSA vs FHSA at $70k: Which account wins for a 30-year-old

At $70,000, you're in the sweet spot where an RRSP beats a TFSA for most 30-year-olds. The tax refund from your RRSP contribution - roughly $2,100 to $2,600 depending on your province - gives you more money to invest than putting the same amount into your TFSA directly.

But if you're planning to buy a home in the next few years, the FHSA flips this calculation completely.

Why the RRSP usually wins at $70k

Your marginal tax rate at $70k ranges from about 28% in BC to 37% in Quebec. When you contribute $5,000 to an RRSP, you get back $1,400 to $1,850 as a tax refund. Invest that refund too, and you've put more total money to work than if you'd contributed $5,000 to a TFSA.

The math works because you're earning enough to hit the higher tax brackets but not so much that you'll likely retire in the same bracket. Most people's retirement income is lower than their peak working income, so you're borrowing from the CRA at today's higher rate and paying it back later at a lower rate.

The catch: this only works if you actually invest the refund. Spend it on vacation and the TFSA was the better choice.

When the FHSA changes everything

If you're buying your first home within the next 15 years, max out your FHSA first. You get the same tax deduction as an RRSP - that $1,400 to $1,850 refund on a $5,000 contribution - but you can withdraw everything tax-free for a home purchase.

With the RRSP, you can borrow up to $35,000 through the Home Buyers' Plan, but you have to pay it back over 15 years. Miss a payment and it counts as taxable income. The FHSA has no payback requirement.

At $70k, you can contribute $8,000 per year to your FHSA, which means it takes five years to max out the $40,000 lifetime limit. TaxSplit.ca will show you exactly how much you'd save in your province at your income level.

The order that makes sense

If you're buying a home: FHSA first ($8,000), then RRSP with whatever's left of your contribution room, then TFSA.

If you're not buying a home: RRSP first until you've used up most of your room, then TFSA for shorter-term goals or once your income drops and the tax benefit shrinks.

The TFSA becomes more valuable later in your career when you're earning enough that your retirement income might not be much lower than your working income, or when you need flexible access to your money.

At 30 with a $70k income, you've got time for the RRSP's tax deferral to work in your favor. Just don't ignore the FHSA if homeownership is on your radar.