Spousal RRSP: Retirement Planning Rules & Benefits for Couples
A spousal RRSP is a registered retirement savings plan that's owned by one person — the annuitant or plan holder — but contains funds contributed by their spouse or common-law partner, who is known as the contributor.
Spousal RRSPs are particularly advantageous for couples where one partner makes significantly more than the other, and for couples where one partner is likely to be in a higher tax bracket than the other when they retire.
They can also be useful for couples with an age and income gap — the higher-income partner can’t contribute to their own RRSP after Dec. 31 of the year in which they turn 71, but they can keep contributing to a spousal RRSP until their spouse turns 71.
» Pressed for time? ⏰ Skip ahead to the benefits and drawbacks of a spousal RRSP.
🤓 When does a spousal RRSP make sense?
Let's say one spouse earns a high income and contributes regularly to their own RRSP, while the other is a stay-at-home parent.
This could create a situation in which the first partner has a significant amount of RRSP savings but pays a higher income tax rate, whereas the partner who stays home may not pay much income tax but also may not have much in their RRSP.
In retirement, the two partners will have very different incomes, since they will be withdrawing more money from one partner’s RRSP – and they will pay a higher tax rate on that income.
If the higher-earning partner contributes to a spousal RRSP in the lower-income partner’s name, they get to take the tax deduction on their own return — lowering their taxable income.
This strategy could help the couple save for retirement in a more balanced manner. It can also lead to lower combined taxes when they start withdrawing funds in their retirement years than if all their retirement savings were under one person’s name.
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How spousal RRSPs work
Most major financial institutions offer spousal RRSPs.
When you open the account, you’ll specify which partner is the contributor and which is the annuitant, a fancy word for recipient. Even though the contributor provides the funds, the annuitant owns the account and makes the investment decisions. They’re also the only person allowed to withdraw money from the account.
Contributions to a spousal RRSP count toward the contributor’s RRSP deduction limit, and don’t affect the annuitant’s deduction limit. It’s important for the contributor to make sure contributions to their own RRSP and the spousal RRSP don’t add up to more than their contribution room, or they’ll face RRSP over-contribution penalties.
Spousal RRSP vs. personal RRSP
A personal RRSP and a spousal RRSP are two different accounts. You can have both, whether you’re the contributor or the annuitant. For example, if you’re the higher-earning spouse, you can contribute to both your own personal RRSP and a spousal RRSP in your partner’s name. Your partner can also have their own personal RRSP. These RRSP accounts can be at different financial institutions of your choosing, or you can keep all your accounts at the same institution.
However, you have only one pot of RRSP contribution room, which is based on the income you earned in the previous year, plus any unused contribution room from prior years. You can find your RRSP contribution room in your CRA My Account or on your notice of assessment.
You can allocate that contribution room however you’d like between the two accounts, but be careful not to go over the limit. For example, if you have $10,000 of RRSP contribution room, you could contribute $5,000 to each plan, or you could contribute any combination of amounts that add up to $10,000 or less.
Spousal RRSP contribution rules
Spousal RRSP contribution limits are determined by the contributor’s overall limit. Opening a spousal RRSP does not give you additional contribution room.
RRSP contribution room is based on 18% of your previous year’s earned income, up to $32,490 for the 2025 tax year. Any unused contribution room gets carried forward to future years.
Spousal RRSP withdrawal rules
By Dec. 31 of the year in which you turn 71, you must choose one of three options for any RRSPs in your name – including a spousal RRSP. Your options include:
Convert it to an registered retirement income fund, or RRIF
Use the funds to buy an eligible annuity
Withdraw the funds in cash
Withdrawals will trigger a significant withholding tax, which you won’t pay if you purchase an annuity or transfer the funds directly to an RRIF.
If you transfer your spousal RRSP to an RRIF, you’ll then have to withdraw a minimum amount based on your age, which will be taxed at your marginal tax rate.
Early withdrawals from a spousal RRSP are allowed, but a three-year attribution rule applies. To avoid having the withdrawal taxed as part of the contributor’s income, the annuitant has to wait the remainder of the calendar year plus two full years after the last contribution before withdrawing funds.
Let’s say you contributed to a spousal RRSP in March 2025. Your spouse would have to wait until 2028 to make any withdrawals if you want the funds to be taxed as part of their income. If you made any additional contributions in 2025, 2026 or 2027, the clock would reset and you’d start the three-year wait again.
Contributors are not required to claim their spouse’s withdrawals as income in the following situations:
Withdrawals are made after the relationship ends.
Either spouse is no longer a resident of Canada.
The money is used for the Lifelong Learning Plan or Home Buyers’ Plan.
The contributor dies in or before the year of the withdrawal.
Spousal RRSPs can be complicated. If you think one might be useful for you and your partner, it’s a good idea to speak with a financial professional who can explain how the benefits and drawbacks may apply to your situation.
Benefits and drawbacks of a spousal RRSP
Like any retirement savings strategy, contributing to a spousal RRSP comes with advantages and disadvantages.
👍 Benefits of a spousal RRSP
Immediate tax deduction. Contributions made to a spousal RRSP give the contributor an immediate tax break by lowering their taxable income.
Potential future tax break. When it’s time to withdraw funds from the accounts in retirement, splitting income between partners could mean a lower tax bill overall.
Higher borrowing limit in the Home Buyers’ Plan. Each first-time homebuyer can borrow up to $60,000 from their RRSP as part of the Home Buyers’ Plan. Opening a spousal RRSP in the lower-earning partner’s name early on could allow couples to borrow up to $120,000.
Continued contributions. Taxpayers can’t contribute to their own RRSPs after Dec. 31 of the year in which they turn 71. However, they can continue to contribute to the spousal RRSP if they have contribution room available and their spouse has not yet turned 71.
👎 Drawbacks of a spousal RRSP
Three-year attribution rule. Spousal RRSP contributions must stay in the account for the remainder of the calendar year, plus two more years before being withdrawn as the annuitant’s taxable income. Withdrawals made within three years of the last contribution will be included in the contributor’s taxable income.
Can be complex and may not be the best option for all couples. A spousal RRSP can be a good option for some, but it’s not the best fit for everyone. A financial advisor can help you decide whether it’s a good option for your household’s situation.
Can be complicated if the relationship breaks down. Rules about shared finances, especially for common-law couples, differ between provinces. It’s important to seek professional advice from a financial advisor to help you navigate this complex process.
Frequently asked questions
Can I contribute to my own spousal RRSP?
Can I contribute to my own spousal RRSP?
A spousal RRSP is designed for one partner to contribute to the other partner’s retirement savings — not their own. However, you can also contribute to your own personal RRSP, whether you’re the higher- or lower-earning partner. It’s worth consulting a financial advisor about spousal RRSP products from investment brokerages that may permit contributions from both the annuitant and their spouse (contributor).
Note that CRA requires the contributor to report the RRSP contribution and deduction on their income tax and benefit return, and not the annuitant.
Who claims a spousal RRSP contribution?
Who claims a spousal RRSP contribution?
Tax deductions for contributions to a spousal RRSP are claimed by the contributor, and don’t affect the annuitant’s deduction limit.
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Siddhi Bagwe
Siddhi Bagwe