The right answer depends on three numbers: your debt rate, your expected investment return after tax, and your time horizon. Enter them below and get a clear verdict — not "it depends".
Currency region:Amounts in CAD
Your Numbers
Your debt
The dollar amount you're deciding between debt payoff and investing
S&P 500 historical average: ~10% gross, ~7% inflation-adjusted. Use 7% for a realistic benchmark.
Pick the range closest to your household income. This estimates your marginal tax rate on investment gains — the rate on your last dollar earned.
Do you get an employer RRSP / DPSP match?
Capture the full employer match before anything else. It's an immediate 50–100% return. This calculator assumes you've already done that.
The Unburden app tracks your debt payoff progress, Burden Score, and debt-free date. Once debt is gone, your freed payments go straight to building wealth.
If your debt interest rate exceeds your expected after-tax investment return, pay off debt first — it's a guaranteed return equal to your interest rate. Credit card debt at 20–22% APR almost always beats investing, since long-run stock market returns average 7–10% annually before tax. Debt below 4–5% APR may warrant investing instead, especially in tax-advantaged accounts.
What's the break-even interest rate?
The break-even is your expected after-tax investment return. At an 8% gross return in a 33% tax bracket, your after-tax return is roughly 5.4%. Any debt above 5.4% APR should be paid off before investing in taxable accounts. For TFSA or Roth IRA contributions, you keep more of the gain — which raises the break-even slightly.
Does employer matching change the answer?
Yes — always capture employer matching first, before paying extra on debt. A 50% employer match on your contribution is an immediate 50% return on that dollar before any investment growth. No debt payoff strategy beats that. Capture the full match, then apply the debt-vs-invest math to remaining dollars.
Is paying off debt really the same as investing?
Paying off debt delivers a guaranteed, risk-free return equal to the interest rate you avoid. Investing delivers an expected return with real volatility — markets can drop 30–40% in a given year. For high-interest debt, the guaranteed return almost certainly beats the risk-adjusted investment return. For very low-rate debt, the long-run expected return from a diversified portfolio likely wins.
Made your decision? Track your progress in Unburden.