Contributing to your spouse's RRSP

If you invest in your spouse's RRSP, you could have more money in your pockets when you start to withdraw an income at retirement. This tax strategy is particularly beneficial if one spouse draws a much higher retirement income than the other.

Spread out your retirement income

If you contribute to your spouse's RRSP, you can spread out both incomes more evenly at retirement so you'll pay less income taxes. For example, if you both withdraw $30,000 a year from your RRSP, you'll pay less income taxes than if you withdraw $15,000 and $45,000 respectively. This is called income splitting.

Contributing to your spouse's RRSP also has other advantages:

  • If your spouse doesn't contribute to an RRSP, starting a plan in his or her name can double your downpayment for your first home. The Home Buyers' Plan (HBP) lets you withdraw up to $35,000 from your RRSP with no penalties, and you can add up to $35,000 from your spouse's RRSP to your downpayment.
  • The same reasoning applies to financing your return to school. The Lifelong Learning Plan (LLP) allows you to withdraw amounts from RRSPs (yours or your spouse's) to pay for your education (up to $20,000 per spouse).

Take note

You have to stop contributing 3 years before retirement so your spouse's withdrawals are not included in your income.

A spousal RRSP strategy has to take into account all income, including non-registered retirement income and pension plans. For example, a spouse who gets a pension from his employer may contribute less to his own RRSP and contribute to his spouse's.

Tools and tips

RRSP: Don't wait!

The sooner you start contributing, the better!

Read tip - The sooner you start contributing, the better!

Unused RRSP contribution room

If you haven't contributed your maximum, you can catch up because your unused contribution room in subsequent years.

Read tip - Unused RRSP contribution room

An RRSP loan can help you increase your contribution

Borrowing $10,000 for your RRSP could pay off in a big way.

Read tip - An RRSP loan can help you increase your contribution

Pay down your mortgage or contribute to your RRSP?

Your strategy should depend on your lifestyle and your age.

Read tip - Pay down your mortgage or contribute to your RRSP?

HBP: Using your RRSP to buy a home

How to withdraw part or all of your RRSPs without paying income taxes.

Read tip - HBP: Using your RRSP to buy a home

Your savings: RRSP or TFSA?

It all depends on what you want to do with your money.

Read tip - Your savings: RRSP or TFSA?