You can contribute to your partner’s RRSP

September 1, 2016

A Spousal RRSP can ensure that future retirement income is split between two spouses. This may help to reduce a higher tax bracket when you have more taxable income in your retirement years.

Seniors (38)

By allocating future taxable income as evenly as possible between you and your spouse, you can aim to provide both spouses with similar retirement incomes, referred to as “income splitting”.

Understanding your future income streams By allocating future taxable income as evenly as possible between you and your spouse, you can aim to provide both spouses with similar retirement incomes, referred to as “income splitting”.

How does it work? The contributor to a spousal RRSP benefits from the tax deduction while building a retirement nest egg for the spouse. Amounts withdrawn from a spousal RRSP will be considered part of your spouse’s taxable income, insofar as you have not contributed any amount to a spousal plan in the current or the two preceding years.

Gifted monies can be used in the Spousal RRSP Where a spouse is being gifted monies as an heir, consider purchasing a spousal RRSP for the highest income earner. As well look at maximizing the use of any unused RRSP contribution room that may exist for both spouses. The TFSA also works well when combined with an RRSP strategy, depending on the situation.

 

Publisher's Copyright & Legal Use Disclaimer

All articles are a legal copyright of Adviceon®Media.

The particulars contained herein were obtained from sources which we believe are reliable, but are not guaranteed by us and may be incomplete. This website is not deemed to be used as a solicitation in a jurisdiction where this representative is not registered. This content is not intended to provide specific personalized advice, including, without limitation, investment, insurance, financial, legal, accounting or tax advice; and any reference to facts and data provided are from various sources believed to be reliable, but we cannot guarantee they are complete or accurate; and it is intended primarily for Canadian residents only, and the information contained herein is subject to change without notice. References in this Web site to third party goods or services should not be regarded as an endorsement, offer or solicitation of these or any goods or services. Always consult an appropriate professional regarding your particular circumstances before making any financial decision.

Mutual Funds and/or Segregated Funds Disclaimer

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investment funds, including segregated fund investments. Please read the fund summary information folder prospectus before investing. Mutual Funds and/or Segregated Funds may not be guaranteed, their market value changes daily and past performance is not indicative of future results. The publisher does not guarantee the accuracy and will not be held liable in any way for any error, or omission, or any financial decision. Talk to your advisor before making any financial decision. A description of the key features of the applicable individual variable annuity contract or segregated fund is contained in the Information Folder. Any amount that is allocated to a segregated fund is invested at the risk of the contract holder and may increase or decrease in value. Product features are subject to change.