Saving & investing
RRSP, TFSA or mortgage: coordinate competing goals
Decide what information is needed when the same money has several possible jobs.
The key idea
This is a coordination question: what must the money do, when is it needed, and what constraints apply? Account rules, accessible cash and mortgage permissions belong in the same picture. No fixed priority order fits every household.
Name the money once
Is it existing cash, a future monthly surplus or an expected refund? Record the amount and date once. A forecast refund is not cash already available, and a current savings balance is not recurring monthly income. Cover required obligations in the comparison before adding optional transfers.
Use three questions instead of a ranking
- Purpose: Is this for a near-term bill, a reserve, reduced debt or later spending?
- Access: Can you get it back when needed, at what cost and with what tax effects?
- Permission: Is account room confirmed, and does the mortgage contract allow the payment?
RRSP deductions and generally taxable withdrawals, TFSA contribution/recontribution limits and mortgage prepayment privileges are different rules. An attractive projected balance does not override them. CRA: RRSP overview CRA: before contributing to a TFSA FCAC: paying off your mortgage faster
Compare alternatives with the same budget
One option could retain cash; another could put the same amount into an account; another could reduce principal. There is no need to divide equally or include education savings if that is not a household goal. Renters can compare cash, debt and saving without a mortgage branch.
Keep unresolved questions visible
Write down missing contribution history, lender terms or tax questions rather than turning them into zero. A qualified adviser may help assess complex interactions, but ask what services and costs are included. The purpose of a worksheet is to prepare that conversation, not label one option as personally optimal.
See it in practice
A household with $300 and three jobs
Fictional example: after essential spending and minimum debt payments, $300 is available. An annual bill needs $120 per month. That leaves $180, not $300, to compare between a reserve, investment or permitted prepayment. $120 + $180 = $300. A later loss of $200 income would leave only $100 before that bill allocation, revealing a $20 shortfall. No returns, fees or taxes are modelled. A fixed account-first rule would miss the bill.
Check your understanding
Can the same $180 fully fund two alternatives at once?
No. You may compare either use, or an explicit split whose parts total $180. Treating both as fully funded overstates the household’s resources.
A useful next step
Write a one-page choice: amount/date, purpose, access needs and missing rules. The Decision Lab beta can illustrate generic investment and debt/cash paths before personal taxes. It does not choose an RRSP/TFSA strategy or model their room and tax rules.
Inspect the sources
Primary references checked September 18, 2026. A source check is not professional financial or legal review.
- CRA: RRSP overviewCurrent at check · Federal
- CRA: before contributing to a TFSA2026 contribution year; ongoing withdrawal rule · Federal / Canadian tax residents
- FCAC: paying off your mortgage fasterCurrent at check · Canada; contract-specific