Should you consider a spousal RRSP?

Should you consider a spousal RRSP?


According to some studies, being married can be good for your health and even help you live longer. But did you know that it can also lead to a tax break?

Contributing to your common-law or married spouse’s registered retirement savings plan (RRSP), can help build your partner’s retirement nest egg. At the same time, you can lower the amount of tax that you pay collectively.

A tax break now

That’s because when you contribute on behalf of your spouse, you get the tax deduction. So if you earn significantly more than your spouse, you will get a bigger tax break by contributing to a spousal RRSP, than your spouse would by contributing to his or her own RRSP. Whether you contribute to your own or to a spousal RRSP, your contribution counts against your own RRSP deduction limit — the maximum RRSP contribution you can claim as a deduction on your income tax return for the current year. Your spouse’s contribution limit is not affected, however, by your contribution to a spousal RRSP.

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