Spousal RRSP in Canada: Rules, Benefits and Whether to Contribute

A spousal RRSP is an RRSP owned by one partner (the annuitant) but funded by the other (the contributor), who claims the deduction. It is a way for couples to split retirement income. This page covers how it works, the contribution rules (including contributing after 71), the attribution rule that taxes early withdrawals back to the contributor, who a spousal RRSP suits, and what happens on separation. The rest of the RRSP guides are in the RRSP and RRIF guide directory.

How a spousal RRSP works

1. The higher-income spouse (contributor) makes RRSP contributions to an account owned by the lower-income spouse (annuitant)
2. The contributor claims the tax deduction at their higher marginal rate
3. In retirement, the annuitant withdraws the funds and pays tax at their lower rate
4. The net result: the tax deduction was claimed at a high rate, but the withdrawal is taxed at a low rate

Example

Contribution rules

Example: contribution room

If Spouse A has $20,000 of RRSP room and contributes $12,000 to a spousal RRSP, Spouse A has $8,000 of room remaining for their personal RRSP. Use the RRSP contribution room calculator if you need to confirm how much room is left.

Can you contribute to a spousal RRSP after 71?

Yes, in some cases. You cannot contribute to your own RRSP after the year you turn 71, but you can keep contributing to a spousal RRSP when:

• Your spouse or common-law partner is 71 or younger at the end of the year.
• The contribution uses your own RRSP deduction room.

The last day is December 31 of the year your spouse turns 71, not the usual deadline 60 days into the next year.

New room keeps building after 71 when you have earned income: the CRA adds 18% of the previous year’s earned income, up to the annual dollar limit and less any pension adjustment, to your unused room from earlier years. Earned income includes employment and self-employment earnings and net rental income.

Spousal RRSP attribution rules: the 3-year rule

A withdrawal made soon after a spousal contribution can be taxed to the contributor instead of the annuitant. The rule, as CRA’s guide T4040 sets it out:

• The contributor made a contribution to any spousal RRSP in the year of the withdrawal or either of the two years before.
• The contributor includes the lesser of those contributions and the amount withdrawn.
• From a spousal RRIF, only the amount above the year's minimum is attributed.
• A transfer from a spousal RRSP to the annuitant's FHSA that counts as a taxable withdrawal is caught the same way.
• It catches only withdrawals that are taxable to the annuitant, so eligible Home Buyers' Plan and Lifelong Learning Plan withdrawals are not attributed.
• Exception: you were living separate and apart because the relationship broke down.
• Exception: either spouse was a non-resident of Canada at the time.
• Exception: the amount is transferred directly to another RRSP, a RRIF or an eligible annuity.
• Exception: the contributor died in the year of the withdrawal.

Because the count uses calendar years, a contribution made in December starts the clock for that whole year.

Couples who plan to draw on a spousal RRSP from a set year often make the last spousal contribution at least 3 calendar years before it, so the first withdrawal falls outside the window.

When a spousal RRSP makes sense

• Large income gap between partners: The bigger the gap, the bigger the tax savings from income splitting
• One spouse will have significantly less retirement income: Equalizing retirement income reduces the couple’s total tax bill
• Parental leave or a career break: the working spouse can keep contributing to the other spouse’s spousal RRSP, so both partners keep building retirement savings
• A younger spouse: a contributor past 71 can keep using their deduction room in a younger spouse’s spousal RRSP (see contributing after 71)

Deciding whether to contribute

Couples who use a spousal RRSP often aim to roughly equalize projected retirement income. Estimate each partner’s expected income from CPP, OAS, workplace pensions and personal RRSPs, then direct spousal contributions to the partner with the lower projection. The larger and more lasting the gap, the larger the saving; if both partners expect similar incomes, the benefit is small. It also matters when the money will be needed: a withdrawal inside the attribution period is taxed to the contributor.

Separation and divorce

The spousal RRSP belongs to the annuitant. For married couples it is generally family property divided under provincial family law; common-law partners are treated differently by province (in BC they are included after two years together, while Ontario’s property-division rules apply only to married spouses and Quebec’s family patrimony only to married and civil-union spouses). The contributor cannot take the contributions back, and the expected income-splitting benefit ends. Transfers between the partners’ plans as part of a settlement are covered in can you transfer an RRSP to your spouse.

Spousal RRSP vs pension income splitting

Since 2007, couples can split eligible pension income (including RRIF withdrawals after age 65) directly on their tax returns. This reduces the need for spousal RRSPs somewhat, but spousal RRSPs still offer advantages:

• Withdrawals before age 65: RRIF income only qualifies for pension income splitting from age 65, while a spousal RRSP or RRIF shifts income to the annuitant at any age once the attribution period has passed
• No 50% cap: pension income splitting can move at most half of eligible pension income to a spouse, while spousal RRSP withdrawals are taxed entirely to the annuitant (after the attribution period)
• Over-65 stacking: Use both spousal RRSP income splitting and pension income splitting for maximum benefit

Bottom line

A spousal RRSP is most valuable when there is a significant income gap between partners. The contributor gets the tax deduction at their high rate, and the annuitant pays tax at their low rate in retirement. Withdrawals made after the 3-year attribution window are taxed to the annuitant. If you are nearing retirement, pair this with your RRSP to RRIF conversion plan.

Use our RRSP calculator to model how spousal RRSP contributions affect your retirement savings.

Frequently asked questions

Can I contribute to a spousal RRSP if my spouse already has their own RRSP? Yes. Your spouse can have both a personal RRSP and a spousal RRSP. The accounts are separate; your contributions go into the spousal account and are counted against your own room, not your spouse’s.

What happens to the spousal RRSP at retirement? When your spouse is ready to withdraw, they can withdraw from the spousal RRSP directly or convert it to a spousal RRIF, which they must do by the end of the year they turn 71. Once the 3-year attribution window has passed since your last contribution, withdrawals are taxed in your spouse’s hands.

Is a spousal RRSP better than a regular RRSP? For couples with significantly different incomes or expected retirement incomes, yes. For couples with similar incomes, the benefit is smaller. Run the numbers with an RRSP calculator using both partners’ expected retirement income to determine the optimal contribution strategy.

Related Reading

• What to do when you turn 71
• Retiring on RRSP and TFSA Only in Canada: No Pension Drawdown Guide
• TFSA vs RRSP for Beginners