Financial tools

The RRSP refund loop, quantified.

One move, repeated: contribute to your RRSP, deduct the contribution at your marginal rate, and park the refund in a TFSA. Next year it comes out of the TFSA — tax-free, with a year of growth — and goes back into the RRSP on top of your contribution. Every refund finances the next deduction instead of being spent.

That is the whole trick, and it compounds. The same out-of-pocket dollars end up funding a much larger RRSP, because each refund returns as new contribution. How far it compounds depends mostly on your marginal rate, which is set by your income and your province. At the same $95,000 salary, a dollar of deduction refunds about 27.5¢ in Nunavut and 36.1¢ in Québec — the calculator shows every jurisdiction in between.

How the loop works

  • Contribute your own money to the RRSP.
  • Deduct it — the refund comes back at your combined federal and provincial rate (2026 brackets, Ontario surtax and the Québec abatement included).
  • Park the refund in a TFSA, where it grows tax-free.
  • Contribute it again next year — refund plus growth, on top of your next contribution. Repeat.
  • Contribute as room allows — a pension adjustment shrinks the new room to 18% of income minus the PA, and unused room carries forward.

The calculator below optimizes the deduction schedule year by year: you state what you aim to contribute, and it works out how much to deduct this year versus carry to a higher-income year. It tracks RRSP room as it accrues (18% of income, less any pension adjustment — a pension never touches room you already have), grows your wage at a rate you set, caps fresh contributions at a share of after-tax income, and parks each refund in your TFSA up to its room, spilling the rest into a taxable account. Set your retirement age and nothing defers past it — the final working year deducts what is left, and the marked row is that year. You can also point TFSA savings at the RRSP: the sweep fills spare room, earns the deduction, and the TFSA room comes back the following year with the refund in it. Every field carries a (?) prompt that explains it. The loop then runs for all thirteen provinces and territories at your income. Numbers are estimates: a constant rate of return — a planning aid, not tax advice; verify with a professional before you act.

Built by ethica — the same measure-first habit we bring to storage, networks, and AI platforms, applied to a question that compounds.

The calculator

Your combined federal and provincial rate — the biggest lever on every refund.

Taxable salary for this year, before RRSP deductions. It sets your marginal rate and this year's new RRSP room (18% of it). Raises are assumed in the options below.

The plan starts this year and runs to the retirement age below — the working years are the difference.

Salary, fresh contributions, and new room stop after this year. Nothing defers past it — the final working year deducts the whole pool, and the marked row is that year.

Unused RRSP room you carry into year one — your CRA notice of assessment shows it. Room you cannot fill carries forward.

What is already inside your RRSP. It compounds tax-free for the whole plan and is included in the retirement totals.

A work pension shrinks the new room added each year (18% of income minus the PA). It never removes room you already have.

Unused TFSA room you carry into year one, before the annual additions below.

What is already inside your TFSA. It compounds tax-free and is included in the retirement totals.

Optional — savings rate and other assumptions

The share of each year's earnings that funds the plan, in fill order: RRSP room first, then TFSA room, then the taxable account. Leave blank to assume 18% — the RRSP room rate. Funding never exceeds your after-tax income.

Growth inside the RRSP and TFSA — both compound tax-free. Leave blank to assume 6.5%, a balanced-portfolio estimate.

Annual raise assumption. New room and future refunds track it. Leave blank to assume 2%, roughly standard inflation.

New TFSA room added each January. Leave blank to assume $7,000, the 2026 limit.

Do this now

    Combined marginal rate —
    New room per year —
    Optimal deduction now —
    Optimal yearly contribution —
    RRSP at retirement —
    TFSA at retirement —
    Taxable at retirement —
    The loop adds —

    Your loop, year by year

    YearInto RRSPFrom TFSADeducted this yearTax refundInto TFSATaxable accountRoom leftRRSP balance

    All provinces and territories

    ProvinceMarginal rateRefund, year 1Total after the loop

    Sorted strongest first — your province is highlighted, and the top result carries the green bar.

    2026 federal and provincial brackets, including the Ontario surtax and the Quebec abatement. New RRSP room: 18% of income less the pension adjustment, capped at the 2026 dollar limit — a pension shrinks new room but never removes room you already have. Each year your savings rate funds the accounts in order — RRSP room first, then TFSA room, then the taxable account — and never exceeds after-tax income; wages grow at the rate you set, and the deduction schedule re-optimizes each year. Set your retirement age and nothing defers past it, the final working year deducts everything left, and the marked row in the table is that year. Refunds park in the TFSA up to its room — the annual limit re-adds each year, a withdrawal re-adds the following year — and money that overflows both shelters grows in a taxable account at the capital-gains rate. Tax on RRSP withdrawals in retirement is not modelled. Assumes a constant rate of return; estimates for planning only, not tax advice.