How much do I need to retire in Canada?

A common rule is to accumulate 25× your annual expenses (the "4% rule"). Use the Solutech Retirement Planner to model CPP, OAS, and your personal savings rate for a Canadian-specific estimate.

What is the OAS clawback threshold in Canada?

In 2025 the OAS Recovery Tax kicks in when net income exceeds $93,454. For every dollar above that threshold, 15 cents of OAS is clawed back. The planner models this automatically.

When should I start CPP?

You can start CPP as early as 60 (with a reduction) or as late as 70 (with an 8.4%/year increase after 65). Delaying is usually advantageous if you expect to live past your mid-70s.

When can I claim Social Security in the USA?

You can claim Social Security as early as age 62 or as late as age 70. Claiming early reduces your benefit; claiming at Full Retirement Age (66–67 depending on birth year) gives your standard benefit; claiming at 70 maximizes it with an 8% annual increase. The Solutech planner calculates your Primary Insurance Amount and all claiming scenarios.

What is the difference between a 401(k) and Roth IRA?

A Traditional 401(k) lets you contribute pre-tax dollars and pay taxes in retirement. A Roth IRA lets you contribute after-tax dollars but withdrawals are tax-free. The Solutech planner models both with employer match and Required Minimum Distributions (RMDs) starting at age 73 (SECURE 2.0).

How much can I contribute to a 401(k) in 2025?

In 2025, you can contribute up to $24,500 to a 401(k) (or $30,500 if age 50+). Your employer may also add matching contributions. The Solutech planner lets you model various contribution rates and employer match scenarios.

RRSP & TFSA8 min read

RRSP vs TFSA in 2026: Which Should You Prioritize?

A practical framework for deciding between RRSP and TFSA contributions in 2026 — tax math, OAS clawback risk, spousal strategies, and the key rule most Canadians miss.

By Solutech·April 2026

The Fundamental Difference

Both accounts shelter investment growth from tax — but they do it in opposite ways. Understanding this difference determines which one benefits you more.

RRSP

Contributions are tax-deductible
Growth is tax-deferred
Withdrawals are taxed as income
Must convert to RRIF at age 71
RRIF withdrawals count toward net income
Affect OAS clawback and income-tested benefits

TFSA

Contributions are after-tax
Growth is tax-free
Withdrawals are completely tax-free
No forced withdrawal age
Withdrawals do not affect net income
Do not trigger OAS clawback

In theory, if your tax rate is identical when you contribute and when you withdraw, the two accounts produce the same after-tax result. In practice, your rates differ — and that difference tells you which account wins.

2026 Contribution Limits

$7,000

TFSA Annual Limit

Indexed to inflation in $500 increments

~$102,000

TFSA Lifetime Room (since 2009)

For those eligible every year since inception

$32,490

RRSP Annual Limit

18% of prior-year earned income, up to the cap

Dec 31, age 71

RRSP Age Limit

Must convert to RRIF or annuity by year-end

Note: Check your Notice of Assessment from the CRA for your exact RRSP room. Unused RRSP room carries forward indefinitely. Unused TFSA room also carries forward and is restored when you withdraw.

The Decision Framework: RRSP vs. TFSA

The single most important variable: Will your tax rate be lower in retirement than it is today?

Your Situation	Lean Toward
High income now (top bracket), lower income expected in retirement	RRSP
Low or moderate income now, expected similar income in retirement	TFSA
Retirement income near OAS clawback threshold ($93k+)	TFSA strongly
Expect large RRIF withdrawals and don't want to compound the tax hit	TFSA
Saving for a goal with possible early withdrawal	TFSA
High income now and want to split income with a lower-earning spouse	Spousal RRSP

Many Canadians in the peak earning years (45–60) should prioritize RRSP to capture the deduction at a high marginal rate, then pivot to TFSA contributions as retirement approaches and the RRSP deduction shrinks in value. This isn't an either/or choice — it's a sequencing question.

The OAS Clawback Factor — Why TFSA Wins for High-Income Retirees

The OAS Recovery Tax claws back 15 cents for every dollar of net income above ~$93,000. RRIF minimum withdrawals count toward that net income. TFSA withdrawals do not.

For a retiree with CPP, OAS, and RRIF withdrawals pushing net income near or above $93,000, drawing from TFSA instead of RRIF can save thousands per year in clawback. This is not theoretical — it is a real cash difference for many Canadians with defined benefit pensions, large RRIF accounts, or rental income.

Example: A retiree with $95,000 net income (CPP + OAS + RRIF) has $2,000 above the clawback threshold and repays $300 of OAS. If they could swap $5,000 of RRIF income for TFSA income, their net income drops to $90,000 — below the threshold — and they keep the full OAS payment. The TFSA swap is worth more than just tax savings; it preserves an indexed government benefit.

Spousal RRSP: A Powerful Income-Splitting Tool

A spousal RRSP lets the higher-earning partner make RRSP contributions to an account in the other partner's name. The contributor gets the deduction at the higher tax rate; the spouse withdraws the funds in retirement at the lower tax rate. The result: income gets split, and the household pays less total tax.

The attribution rule prevents immediate re-withdrawal for three calendar years, but beyond that, this strategy is straightforward and effective. Couples where one partner earns significantly more should almost always maximize spousal RRSP contributions as part of a long-term income-splitting plan.

Model Your RRSP and TFSA Balances — Free

Enter your current RRSP and TFSA balances in the Solutech planner and see how different contribution strategies affect your retirement income, tax burden, and OAS clawback exposure.

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