Take the tax credit. The cash after tax is $ 11,400.for the credit, in comparison to the RRSP of $ 15,600. There is no special tax treatment for an RRSP. In fact, it is a pass-through entity. So, the only way the RRSP could out perform the tax credit is outperforming in earnings. Which isn't a tax issue but an investment decision.

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Kevin's taxable income for 2010 was $156,750. He had a choice between investing $15,600 of his income in RRSP or investing that same amount in a plan that would give him a non-refundable federal tax credit of $4,200. Which option should he choose and why?