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Should I use a RRSP or TFSA or both?

Low income:

TFSA can be an ideal savings vehicle if you’re in a low-income tax bracket. RRSPs may not be well suited to low-income Canadians. As the earlier example demonstrates, the RRSP account tax savings are insignificant and may be in a higher tax bracket when you withdraw. You may also consider that TFSA withdrawals don’t impact income-tested benefits and credits, such as child tax benefits and credits, Old Age Security, or Guaranteed Income Supplements.
If you now find yourself in a lower tax bracket, such as when on maternity leave, and made RRSP contributions in the past, consider withdrawing from your RRSP to make a TFSA contribution. However, remember that funds withdrawn from your RRSP can’t be re-contributed later.

Middle income:

One strategy would be using RRSP calculator contribute to your TFSA now and accumulate RRSP room to be used later in a higher tax bracket to optimize the tax benefits.

High income:

This is where you may want to maximize your RRSP contribution limit and TFSA contribution. The tax savings or refund received from the RRSP contribution could be used to fund the TFSA.

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