Spousal RRSP Information

Benefits of Spousal RRSPs

Setting up a spousal RRSPs helps to better split income during retirement. The hogher-income spouse makes a contribution to the other spouse's RRSP. The The tax deduction is associated with the contributor while but the money is now owned by the other spouse. When the funds are withdrawn, they taxed at the lower-income spouse's rate.

A spousal RRSP provides an opportunity to work within the graduated income tax system in order to minimize a household's overall tax burden. When equalizing each spouse's retirement income, the overall tax bill is reduced by keeping both spouses in a lower tax bracket.

This is one of last income-splitting options available to Canadians, and it is beneficial when most people need it - in retirement.

NOTE: As of October 2006, it was announced that senior citizens will be able to split their retirement incomes as of the 2007 tax year. There are some restrictions on what kind of income can be split, and the rules are not as liberal if the couples are under the age of 65, so some couples may want to continue with their spousal RRSPs.

Quick RRSP Links

RRSP Resources