- 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
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.