Investments
RRSP or TFSA in 2026: which account should you fund first?
2026-10-02 · 6 min read · Tax Everyday, Vaughan
For 2026 the RRSP dollar limit is $33,810, or 18% of last year’s earned income if that is less, plus unused room on your Notice of Assessment. The TFSA limit is $7,000 of new room, on top of whatever you have carried forward. The FHSA limit is $8,000 a year if you are eligible and buying a first home.
Use the rate, not a slogan
An RRSP contribution is a deduction. If you are in a high Ontario bracket now and expect a lower one in retirement, the RRSP usually wins. If you are in the first bracket, or you will need the money before retirement, the TFSA usually wins because withdrawals are tax-free and they do not reduce income-tested benefits the way an RRSP withdrawal can.
A rough Ontario combined marginal rate on ordinary income is about 20% near $50,000, about 30% near $90,000, and the low 40s once you are well into six figures, before you even reach the top combined rate above $258,482. The income-tax calculator on this site shows the estimate for a single Ontario resident.
Do not guess your room
Your personal RRSP and TFSA room is on the CRA Notice of Assessment and in My Account. Over-contributing to an RRSP beyond the $2,000 lifetime buffer costs 1% a month. A TFSA over-contribution is also 1% a month. We would rather see the Notice of Assessment than a screenshot of a brokerage balance.
Want this applied to your file?
These notes are general. A return is prepared only after we see your slips.