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Even though you might be paying for the plan, your spouse is the “annuitant,” or owner. This is called a spousal RRSP.

In general, the main goal of the spousal RRSP is to move retirement income from one spouse to the other. When the lower-earning spouse starts taking money out of their retirement fund, their lower tax rate can help you manage your tax bill as a couple, because you both pay less. It may also be possible for the higher-earning spouse to take a tax deduction for the money he or she gives to the family.

Why would you get a spousal RRSP?

Couples who are married or living together can use a spousal RRSP to save for retirement and cut back on their taxes. People can split their money after they retire, which cuts down on taxes. The goal of the plan is to make sure that the retirement savings of two people are equal. This way, when you retire, you’ll both get the same amount of money out of your RRSPs.

A spousal RRSP can help you and your family in many ways. Maybe one spouse makes a lot of money and has a pension from work. The other spouse stays at home. Some people take time off from their jobs to raise families. They may want to return to school or be unable to work because they are sick. You and your partner might both work but make very different salaries.

The person who owns the plan

Most often, the spousal RRSP is registered in the name of the spouse who earns less money. The plan is theirs. This person makes the investment decisions and is the only one who can get their money back. The only, but important, thing that the spouse who makes more money can do is give money.

Taxes are the same for people who work and give money to their spouse’s account while they’re doing that, even though they’re not making as much money as their spouse.

Plan names are chosen by the person who is getting an annuity. There are other ways to get the plan registered, such as if you are over 71 or if your spouse is younger than you.

The Benefits of a Spousal RRSP

To understand how spousal RRSPs can help you save money on taxes, think about how this could work. People who earn more than the other person may consider the following:Either you or your spouse/partner might earn more than them. People make $100,000 a year and $50,000. Individual RRSP limits are equal to 18 percent of your income from last year’s taxes, up to a maximum dollar amount that changes each year. These limits apply to each person.

The most up-to-date limits can be found here. Both of you could contribute to your RRSPs, but only the owner could do so. The person who makes $100,000 could put $18,000 into their RRSP (18% of their income), while the person who makes $50,000 could contribute the same amount, $9,000.

When you open a spousal RRSP, you can make things a little more even. The person with more money can put $14,000 into their fund and another $4,000 into the fund of their spouse or partner. They can still take the total $18,000 deduction on their income tax, and the other person can still take the $9,000 deduction and do the same.

If you don’t have spousal RRSPs, one person will have $1 million in savings and the other will have $400,000. When one spouse withdraws 4% of their money each year, they will be taking home $40,000 a year and paying a lot of taxes. Only one of them is going to make $14,000. To make sure they have equal retirement savings, they should open a spousal RRSP. Each one would have about $700,000 and take out about $28,000 a year.

Because spousal RRSPs aren’t just for when you’re old, they can also help you save money now. When one person decides to leave work and stay home with their kids, or go back to school, the rest of the people will have to deal with that. Contributing to a spousal RRSP in advance will let that person take money out when they’re out of work and pay only a small amount of tax, while the contributing spouse will save some money now.

If you’re over the age of 71 and your spouse or partner isn’t, you can use these accounts to save money on taxes. You can also use them to save money on taxes when you die. As long as your spouse isn’t over the age of 71, you can contribute on their behalf and get a tax break for that money. In the same way, if you die, your estate can give that money to the account so that it doesn’t have to pay inheritance tax.

Some Rules About Spouses’ RRSPs You Should Know

The government has a lot of rules in place to make sure people don’t use spousal RRSPs to avoid paying taxes. This can make it a little difficult to figure out how to use the accounts. It doesn’t matter that you have two accounts to choose from, because you can’t max out your RRSP contribution and then max out your spouse or partner.

You should also be aware of the management fees that RRSPs charge. These fees eat away at the money you save. Large banks often charge a lot of money to manage spouse RRSPs, but this is not always the case.

RRSP contributions made by someone else can’t be taken out for at least three years after they were made. This is called the “three-year rule.” If the money isn’t taken out in three years, it’s taxable income for the spouse who put it in.

Whether you have two RRSP accounts or just one, you can still contribute the same amount to each one. Each person can contribute the maximum amount to their RRSP and the spousal RRSP, which is $20,000, but they can split that amount up. Put $15,000 in one, $5,000 in the other. You don’t have to go over the total amount.

RRSPs can be added until the end of the year your spouse turns 71.

RRSPs can be turned into retirement income products like registered retirement income funds (RRIFs) or annuities when you turn 71 at the end of the year. These products are called “retirement income products.” At this point, the retirement income is taxed in the name of the lower-earning spouse at his or her current tax rate.


If you and your partner are married or live together, you can both save for retirement with a spousal RRSP. To make sure that the retirement savings of two people are the same, the plan has a goal. This way, when you retire, both of you will get the same amount of money from your RRSPs. When you open a spousal RRSP, you can make things a little more even for your partner. It’s 18 percent of your income from taxes last year that can go into an RRSP for you.

It’s possible for someone who makes $100,000 to put $18,000 into their RRSP. At the start of each year, one spouse will take out 4% of their money. This means they will be taking home $40,000 each year. In order to make sure that people don’t use spousal RRSPs to avoid paying taxes, the government has a lot of rules in place. There is a limit on how much money each person can put into their RRSP, which is $20,000, but they can split that amount. Your RRSP contribution can’t be maxed out, but you can’t max it out for your spouse or partner as well.

Salman Rundhawa
Salman Rundhawa
Salman Rundhawa is the founder of Filing Taxes. Salman provides valuable tax planning, accounting, and income tax preparation services in Toronto, Mississauga, Oakville, and Hamilton.

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