How Spousal RRSPs Work: Key Rules for Contributions and Withdrawals

In today’s fast-paced world, retirement planning isn't just about putting money aside—it's about doing it wisely. For Canadian couples, a Spousal RRSP (Registered Retirement Savings Plan) offers a powerful way to cut down your tax bill while building long-term financial security together. Whether you’re based in Calgary, Toronto, or anywhere across Canada, knowing how spousal RRSPs work can unlock smarter savings, smoother income-splitting, and greater peace of mind for the future. Let’s explore how you can turn this tax-advantaged tool into a key part of your retirement success.
Taxccount Canada Team

What is a Spousal RRSP?

A spousal RRSP allows one spouse (the contributor) to deposit money into a retirement savings account in the other spouse’s name (the annuitant). The contributor gets the tax deduction, while the annuitant owns the funds and will be taxed on withdrawals in retirement ideally at a lower tax rate.

Why Use One?

  • Helps split income in retirement
  • Reduces overall household tax burden
  • Allows the higher-earning spouse to contribute even after age 71 (if the partner is younger)
  • Offers a strategic tax deferral and investment growth opportunity

Key Contribution Rules

Understanding contribution limits and strategy is vital for compliance and tax savings.
✔ Contribution Limits
You can contribute up to your own RRSP deduction limit—not your spouse’s. Your combined contributions (personal + spousal) must not exceed your annual room.
For 2025, the annual limit is 18% of 2024 earned income, up to $32,490, plus any unused carry-forward room.
✔ Age Rules
You can contribute to a spousal RRSP until the end of the year your spouse turns 71, even if you’re older.
✔ Deadlines
To claim your contribution for the 2024 tax year, the deadline is March 3, 2025.

Withdrawal Rules & Attribution Rule

Most taxpayers only think about taxes in March or April—but smart tax planning starts now. With our year-round support, we help clients:

  • Reduce taxes owed legally through deductions and credits
  • Plan RRSP and TFSA contributions for max impact
  • Structure self-employment income efficiently

Prepare for life changes like home purchases, new dependents, or business growth

The 3 Year Attribution Rule

If your spouse withdraws funds within 3 calendar years of your contribution, you’ll be taxed, not them. This can nullify the benefits of splitting income.
Example:
You contributed in 2023. If your spouse withdraws in 2024, 2025, or 2026, the withdrawal may be taxed back to you.
✔ Exceptions:

  • No contributions made in the past 3 years
  • Divorce or legal separation
  • Death of contributor
  • Both spouses are non-residents of Canada
  • Direct transfer to another registered account.

Tip: Avoid early withdrawals unless planned with a trusted personal tax advisor in Calgary or wherever you’re located.

Spousal RRSPs & Homeownership

Over-contributing to an RRSP can be costly.

  • You get a $2,000 lifetime buffer
  • Contributions beyond that incur a 1% monthly penalty
  • Must file a T1-OVP return within 90 days of year-end

Work with a tax accountant in Toronto or your local city to avoid excess contribution headaches.

What Happens in a Divorce?

We’re not your typical accountants. We combine decades of experience, modern technology, and a people-first approach to make tax season smooth, simple, and even stress-free.
💼 Small business owner? Ask us how to coordinate your corporate and personal taxes to minimize your total tax burden.

Why Spousal RRSPs Are Smart for Tax Planning in Canada

Spousal RRSPs are one of the most underused tools in tax planning Canada-wide. They’re especially beneficial when:

  • One spouse earns significantly more
  • One spouse plans to retire earlier
  • You want to reduce Old Age Security clawbacks
  • You seek predictable retirement cash flow

They work best as part of a long-term financial plan designed by experienced professionals

How Taxccount Canada Can Help

Whether you’re new to RRSPs or already contributing, our experts at Taxccount Canada can help you:

  • Maximize tax deductions
  • Plan spousal contributions and withdrawals
  • Avoid attribution penalties
  • Strategically split retirement income

Trusted by Clients Across Canada

From Calgary to Toronto, Canadians turn to us for trusted, compliant, and client-first tax advice.
✔ CRA-compliant filings
✔ Real people, real strategies
✔ Transparent pricing
✔ Personalized retirement planning

📞 Book your free consultation today and discover how spousal RRSPs fit into your retirement plan.

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Frenquently Asked Questions

A Spousal RRSP is a retirement account where one spouse contributes to an RRSP in the other spouse’s name. The contributor gets a tax deduction, while the receiving spouse owns the account and pays tax on withdrawals in retirement—often at a lower rate.

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