Our free TFSA calculator will help you understand how much you can contribute to your TFSA and how your savings could grow in the future.
We made some assumptions about your situation and market performance. Adjust them to see how they'll affect your results.
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- Know the fees Fees are like savings termites — they'll chew right through your TFSA savings. When you invest with Wealthsimple, we charge a 0.5% management fee when you invest up to $100,000 and 0.4% fee when you deposit more than $100,000. That's significantly less than the 2% fees paid by traditional mutual fund investors in Canada.
A word of warning
Our TFSA calculator is not financial advice; it is for illustrative purposes only and the results are estimates. The calculator may be a useful tool in helping you estimate how much your TFSA could be worth, but you should understand that it has limitations. For example, the calculator does not anticipate or take into account future changes to government savings programs or tax rates. Also, rates of return on investments may vary and all contributions compound annually.
A Tax-Free Savings Account TFSA is an investment or savings account that allows your money to grow tax-free. As a Canadian, you can open many TFSAs, but the amount you can contribute to them is limited each year. You can use a TFSA for any savings goal and withdrawals can be made free of tax. Use our TFSA calculator to understand how much you can contribute to a TFSA and how much your money could grow.
Our TFSA growth calculator will let you know how much your TFSA could be worth in the future. The calculator takes into account your current savings, future contributions and the expected rate of return on your investments. Add your marginal tax rate to get a better estimate of how much tax you could save by contributing to a TFSA over a non-registered account. If your contributions exceed the maximum lifetime limit for a TFSA we’ll let you know.
Unlike TFSAs (which can be used for any savings goal) a Registered Retirement Savings Plan (RRSP) is an investment account that is intended for retirement savings. RRSPs offer immediate tax benefits. You don't pay income tax on any money you contribute to your RRSP in the year you make the contribution. A TFSA is not a tax-deferred account. You can't deduct TFSA contributions from your income tax. Instead, TFSAs offer tax-free growth on your investments or savings over time. You can withdraw from a TFSA any time without paying tax. When you withdraw from an RRSP you have to pay withholding tax that ranges from between 5%-30% depending on where you live and how much you withdraw. If you make an early withdrawal for a home purchase you can avoid early withdrawal tax. While you can keep TFSAs for life, RRSPs need to be converted to another account by the last day of the year in which you celebrate your 71st birthday.
With an RRSP, you’re subject to an annual limit you can contribute to, tied to your income. So while your contribution room may be continuously growing, you can’t just deposit that lump sum in one year. With a TFSA, on the other hand, as long as you stay within your available contribution room, you can deposit a lump sum without much thought. So it makes sense that people might choose to put windfalls like inheritance money, work bonuses, and tax refunds into a TFSA.
It depends on your savings goals and when you need to withdraw the money. RRSPs are useful for long term retirement savings. TFSAs are more beneficial for shorter-term savings goals. When you contribute to an RRSP, your cash is locked away until you retire. If you withdraw early, you have to pay withholding tax. You can take out money from a TFSA any time without paying tax on the withdrawal. If you think you’ll need access to your money before retirement—a TFSA is a good option. RRSPs are most beneficial to those in a high tax bracket now but will be in a lower tax bracket when they retire. The RRSP annual contribution ceiling is much higher than that of TFSAs. If you're maxing out your TFSA you could contribute additional savings to another tax-advantaged account like an RRSP. Learn more about RRSPs vs TFSAs here.
Our total potential savings compares what you could save by paying a fee of 0.5% with Wealthsimple Invest to the 2.14% fee a traditional mutual fund investor would pay over the lifetime of their TFSA/RRSP. We charge a fraction of the fees that traditional mutual fund investors pay. Our management fees are 0.5% (they drop to 0.4% when you invest more than $100,000). Underlying fund fees of up to 0.2% also apply. The median fees charged on mutual funds similar to Wealthsimple portfolios is 2.14%. To find the median fee a mutual fund investor might pay we used the Canadian Investment Funds Standards Committee’s mutual fund categories to identify comparable mutual funds to our conservative, balanced and growth portfolios. We excluded mutual fund classes that are not relevant to retail clients (e.g. I or O) or fees are not representative (Class F only reports vendor’s fee and ignores advisor fees. Advisor fees will be added to this.) We sourced the fees of these mutual funds from Morningstar.
You should use a TFSA as you won’t tax on any investment gains within your TFSA. They are useful for for medium-term savings goals like buying a car, saving for a down-payment, wedding, or even an emergency fund. TFSAs offer the ability to withdraw your savings at any time without paying additional tax or penalties. This makes TFSAs useful for many pre-retirement savings goals. A TFSA is also useful if you want to contribute a lump-sum to your account.
You can not trade professionally within a TFSA. While there are no clear guidelines on how much trading is too much—if you’re trading stocks in and out of your TFSA like it’s Candy Crush Saga, you’re probably headed for trouble. The CRA look at trading volume, length of time equities are held, and how much time a person spends researching and trading to determine if you’re trading professionally.
Our TFSA calculator can be used to estimate the future value of your TFSA. The calculator will also let you know if you've exceed the maximum lifetime for TFSAs ($69,500) or if you've exceeded this years limit ($6,000). You can find out how to calculate your current contribution room and lifetime limit here or by visiting the CRA website.
The amount you contribute, investment performance, and your savings timeframe are some factors that affect the future value of your TFSA. Our TFSA calculator uses these inputs to estimate how much your TFSA could be worth in the future. Adjust your contributions or predicted investment performance to see the effect they have on your TFSA value.
To calculate your TFSA lifetime limit, add up each years TFSA limit starting from the year you turned 18 or 2009 (whichever came last). To compute your remaining contribution room subtract the amount you've already contributed to your TFSA from your TFSA lifetime limit. That's what our TFSA calculator does. If you can't remember how much you've contributed and withdrawn over the years you can find out on your CRA My Account. Remember, TFSA limits are cumulative; unused contributions carry forward to the next year. Any amount withdrawn can be re-contributed in the following years.