Did you know you could do a Spousal RRSP to reduce your Income Tax?

A spousal RRSP is a type of RRSP that names your spouse as the "annuitant"-- or owner-- of the plan.  However, you will be the one making the contributions. 

The main goal of a spousal RRSP is to shift retirement income from the higher-income earning spouse to the lower-income earning spouse. When the lower-income partner begins to make use of the retirement income, their lower tax rate will help offset the total income tax. 

The immediate advantage of a Spousal RRSP is the tax deduction on contributions made by the higher-income spouse. 

 A “spouse” includes common-law partners of the same or opposite sex as well as legally wed spouses. 

Advantages of a Spousal RRSP are as follows:

Tax deduction for a higher income earning partner. A higher income partner receives a tax deduction for contributions made in the tax year itself, potentially providing immediate tax relief. 

The lower income spouse will benefit from tax-deferred growth of the shifted income. 

Contributing to a Spousal RRSP can help to match your retirement earnings as a couple and lower your overall household income tax at retirement. This is because the lower-income partner withdraws the funds at a lower tax rate.

WHY WAIT ANY LONGER. 

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