A spousal RRSP is an RRSP that you contribute to on behalf of your spouse or common-law partner, allowing them to own and control the investments while you claim the deduction. This strategy can significantly reduce your household's total tax bill in retirement, especially if one partner earns considerably more than the other. By contributing to a spousal RRSP during your high-earning years, you transfer retirement income to your lower-income spouse, pushing it into their lower tax bracket and saving the family money when withdrawals are made. Canada's progressive tax system means higher earners pay more tax on each dollar of income. If you're the main breadwinner and you simply contribute to your own RRSP, you'll both be drawing from registered accounts in retirement, potentially at similar tax rates. A spousal RRSP flips this script. Instead of both partners reporting $50,000 in annual RRSP income during retirement (taxed at their individual rates), a spousal strategy might result in one partner reporting $70,000 and the other $30,000. The lower earner pays less tax on their portion, and the household saves overall. This approach works best when there's an income gap between partners, which is common in Canadian households.
If your spouse withdraws funds from a spousal RRSP within three calendar years of your contribution, the withdrawal is taxed in your hands, not theirs. This rule expires after the third calendar year, so withdrawals made in year four and beyond are taxed to your spouse.
Yes. Your spouse doesn't need to have employment or investment income to own a spousal RRSP. You contribute using your own contribution room, and your spouse becomes the account owner. This can be an excellent income-splitting strategy for one-earner couples.
Not necessarily. It depends on your income gap and retirement goals. Many couples benefit from a mix: some contributions to their own RRSP and some to a spousal RRSP. The [TFSA vs RRSP Comparison](/tools/tfsa-vs-rrsp) tool can help you weigh both account types.
No. A spousal RRSP uses your contribution room, not your spouse's. Your spouse continues to build their own separate contribution room based on their income, and they can also open their own personal RRSP using that room.
Yes. The CRA treats common-law partners (lived together for at least 12 months, or have a child together) the same as married couples for spousal RRSP purposes.