- 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
- Plan on paying 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:
- 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
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.
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.
Convenient ways to open your RSP today
Attribution rule: three calendar years from the contributor's last contribution to any spousal RSP.