# RRSP, TFSA, FHSA and retirement income in Canada > How the RRSP, TFSA and FHSA differ, the 2026 limits, what happens when you withdraw, and where CPP and OAS fit into your retirement income The RRSP, TFSA and FHSA differ mainly in when you pay the tax. For 2026 the RRSP dollar limit is $33,810, the TFSA limit is $7,000, and the FHSA allows $8,000 a year up to $40,000 over its life. An RRSP deduction lowers this year's tax, TFSA withdrawals are tax-free, and the FHSA is built for a first home and gets both breaks. ## What separates the RRSP, TFSA and FHSA? An RRSP contribution is a deduction, so it lowers this year's tax, and what you withdraw later is taxed as income. A TFSA contribution isn't deductible, but nothing you take out is taxed. Which one wins depends on whether your tax rate today is higher or lower than it will be when you spend the money. The CRA's [TFSA overview](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-free-savings-account.html) covers the rules. Sam in Calgary puts $5,000 into an RRSP and has a 30% marginal rate, so the deduction is worth about $1,500 at tax time (5,000 x 0.30). Put the same $5,000 in a TFSA and there's no refund, but every dollar that comes out later is yours. Deductible RRSP and PRPP contributions can be used to reduce your income tax. Line 20800 - RRSP deduction, [canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-20800-rrsp-deduction.html) The [RRSP calculator](https://tax-services.ca/calculators/rrsp-retirement/rrsp-calculator) shows what a contribution saves you, the [TFSA calculator](https://tax-services.ca/calculators/rrsp-retirement/tfsa-calculator) works out your room, and the [TFSA vs RRSP calculator](https://tax-services.ca/calculators/rrsp-retirement/tfsa-vs-rrsp) puts the two side by side. The page on [FHSA vs RRSP](https://tax-services.ca/fhsa-vs-rrsp-canada) does the same for a first-home saver. ## What are the RRSP, TFSA and FHSA limits for 2026? The RRSP dollar limit is $33,810, and your own limit is 18% of last year's earned income up to that cap, plus unused room, minus any pension adjustment. The TFSA limit is $7,000 for the year. The FHSA allows $8,000 a year and $40,000 over its life, and unused room carries forward up to $8,000. The CRA explains how that works on its [FHSA page](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account.html). The [limits and rates page](https://tax-services.ca/tax-numbers) has every figure with its source, and the [FHSA calculator](https://tax-services.ca/calculators/rrsp-retirement/fhsa-calculator) works out your room. ## What tax is taken when you withdraw from an RRSP? Outside Quebec, the bank withholds 10% on up to $5,000, 20% on the next $10,000 and 30% above $15,000. That's withholding, not your final bill. The whole amount is added to your income for the year, so you might owe more or get some back. Take out $12,000 and the bank holds back $1,900, yet your real tax could be higher or lower. The [RRSP withdrawal tax calculator](https://tax-services.ca/calculators/rrsp-retirement/rrsp-withdrawal-tax) estimates it. ## What changes at 71? You have until December 31 of the year you turn 71 to close the RRSP, turn it into a RRIF that pays you a minimum each year, or use it to buy an annuity. That is also the last day you can contribute. The [RRIF withdrawal tax calculator](https://tax-services.ca/calculators/rrsp-retirement/rrif-withdrawal-tax) shows what the payments cost in tax. ## Where do CPP and OAS fit in? CPP and OAS sit alongside your own savings. Canada Pension Plan payments depend on what you contributed while working, and Old Age Security depends on how long you've lived in Canada. The [CPP guide](https://tax-services.ca/cpp), the [CPP calculator](https://tax-services.ca/calculators/rrsp-retirement/cpp-calculator) and the [OAS calculator](https://tax-services.ca/calculators/rrsp-retirement/oas-calculator) cover each, and the [retirement calculator](https://tax-services.ca/calculators/rrsp-retirement/retirement-calculator) puts everything on one page. ## What do people get wrong about registered accounts? The big one is treating the RRSP withholding as the final tax. Another is pulling RRSP money out in a high-income year when waiting would cost less. The article on [tax myths in Canada](https://tax-services.ca/articles/tax-myths-canada) covers more common misunderstandings. ## More about saving and retirement --- Source: https://tax-services.ca/guides/savings-and-retirement Last updated: 2026-10-07 Independent information site. Not affiliated with the CRA. No services, no guarantee of accuracy. See https://tax-services.ca/disclaimer