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
Expect to have room to contribute before retirement based on the maximum yearly contributions allowed by the Canadian Government
Plan on using your RRSP to help you buy a home and are eligible under the Home Buyers’ Plan; or pay for yours, your spouse’s, or common-law partner’s education and are eligible under the Lifelong Learning Plan

May not be right for you if you:

Are planning on making a contribution but do not have available contribution room
Are turning 72 this year - since you can only hold and contribute to an RSP until the year in which you turn 71
You think you will need this money in the shorter term for reasons other than buying a home (under the Home Buyers’ Plan) or for education purposes (under the Lifelong Learning Plan)

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.