Consolidating spousal rrsp canoe

Let’s say you’re the higher earner: your spouse will eventually have to pay income tax when they withdraw the money, but the idea is that when they do, they’ll be retired and in a lower tax bracket.

In the short term, you get a deduction on your next income tax return. Since 1993, “spouse” has been defined — for tax purposes, anyway — as married couples or common law partners who have lived together in a conjugal relationship for at least 12 months (ie. In 2000, equal tax benefits were extended to same-sex couples.

With a spousal RRSP, Canadian couples have the added advantage of income splitting: If there’s a big income disparity, the higher earning spouse can contribute tax-free money to an RRSP in their partner’s name while claiming the contribution as a deduction on their own tax return.

The goal of a spousal RRSP is to equalize retirement income and reduce the overall household tax bill by transferring income from the higher earning spouse to the other.

The key to a successful financial retirement is early planning and preparation, and our experienced employees are here to help with expert advice and assistance.

Despite these funds being earmarked for retirement, a large number of Canadians continue to borrow from their RRSP for things other than their golden years.

Those who set their contribution targets early and invest well in advance (often on a monthly basis) find it's easier to budget for a larger tax-sheltered investment than those who wait until the deadline.

For the first 60 days of the new year, Canadians can still contribute to their registered retirement savings plan and get a refund on their next tax return.

Unlike a regular investment account, the contributions you make to your RRSP will not be taxed by the government until the funds are withdrawn down the road.

Investments are able to grow and compound tax free.

This section will provide you with some of the answers to many of the questions our clients have asked.

If your question is not answered in this section, we encourage you to call our Client Service Centre 1.800.263.9120 (option 3) 8 to 8 ET or send us an email at This is one of the most important questions to consider when investing for your retirement.