Tax-Free Investing with TFSAs and RRSPs

RRSPs (Registered Retirement Savings Plan) and TFSAs (Tax-Free Savings Account) offer unique tax advantages to save for both long-term and short-term goals.

This TFSA and RRSP infographic illustrates the similarities and differences between the Registered Retirement Saving Plan and the Tax-Free Savings Plan.

Investing

Annual Contribution Limits

$7,000

2024 TFSA

$7,000

2025 TFSA

$31,560

2024 RRSP

$32,490

2025 RRSP

TFSA & RRSP Eligible Investments

A line drawing of a big pile of cash and coins.
Cash & Term Deposits
A line drawing of a hand holding a bar graph with three pillars.
Bonds, Stocks, & Equities
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Mutual Funds

Age of Eligibility

A line drawing of a person with the number 18 on a green circle.

TFSA

Starts at age 18

A line drawing of a person with N/A in a circle.

RRSP

No start limit,
ends at age 71

Tax-Deductible Contributions

A green cross in a circle on a white background.

RRSP

Contributions are tax-deductible 1
Benefits from tax-deferred growth
A green cross in a circle on a white background.

TFSA

Contributions are NOT tax-deductible
Benefits from tax-free growth

Withdrawing Funds

Tax-free Savings Account

No tax on withdrawals

An icon of a dollar sign on a piece of paper.
TFSAs are purchased with after-tax dollars so no tax is paid when funds are withdrawn.
A line drawing of an upturned hand holding a hovering coin.
There is no age limit when you must start withdrawing funds from a TFSA.

RRSP

Withdrawals are taxed as income

A line drawing of a piece of paper with a percent symbol on it.
RRSP investments grow tax-deferred. Tax is paid when the funds are withdrawn.
The number 71 is in a green circle on a white background.
At age 71 you must conver your RRSP to a RRIF (Registered Retirement Income Fund). You must start to withdraw in the year you turn 72.

The Benefits of Tax-Free Investing

Tax-Free Advantage: $24,134

Taxable 2 v. Non-Taxable $7,000 annual investment 4% annual rate of return

Age 45 - Age 65

20 Years of Growth

$184,312
$208,447

35 Years of Growth

Tax-Free Advantage: $108,363
$407,202
$515,566

Taxable 2 v. Non-Taxable $7,000 annual investment 4% annual rate of return

Age 30 - Age 65

2. Assumes a 30% marginal tax rate. Annual investments made at end of year.

Saving for your future can be a lengthy process.

 Both TFSAs and RRSPs offer tax advantages and can help you save for your long-term and short-term financial goals.

If you have any questions, please contact us today.

Source: Canada Revenue Agency

This is a general guide only and not intended to replace professional financial and tax advice in any form. Please consult your financial advisor on how it relates to your situation. 1 Your RRSP contribution lowers your taxable income, so you're reducing the amount of tax you have to pay. *The RRSP contribution limit varies by individual. Speak with your financial advisor about maximizing your contribution.

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