Spousal RSPs

Overview

Ability to contribute to your spouse's RSP
Income splitting opportunities

As well, spousal RSPs are an effective tool in planning for a couple's retirement. Typically, a couple with one wage earner is best suited for a Spousal RSP.

Is this Registered Plan right for you?

Right for you if you:

Plan on making a contribution to your RRSP to reduce your taxable income while your investments grow on a tax-deferred basis
Understand the maximum you can contribute each year as set by the Canadian Government, which depends on your income
Have funds in an RRSP that are eligible for programs that can help you buy your first home or pay for education for you, your spouse, or your common-law partner

May not be right for you if you:

Do not have available contribution room
Are turning 71 this year - since you can only hold and contribute to an RSP until the year in which you turn 71

How it works

Income splitting

Spousal RSPs potentially reduces a couple's overall tax bill by shifting the income from the spouse that earns a higher income to the spouse who earns a lower income.

Withdrawing funds

If a withdrawal is made from the account within three calendar years*, it will be taxed in the hands of the contributing spouse.

Spousal vs. non-spousal RSP

Depending on the circumstances, it may be more appropriate for spouses to have two accounts. So, if you need to make a withdrawal before retirement, you can make it from the account that will benefit more from a tax perspective.