A spousal RRSP is a registered retirement savings plan for two people who are married, in a civil union, or in a common-law relationship, where contributions are made by your spouse even if you are the designated annuitant or owner.
In this way, you increase your savings as a couple for retirement and may benefit from a lower tax rate at the time of withdrawal.
How it works
A spousal RRSP allows one of the spouses in a marriage, civil union, or common-law relationship to contribute to the other spouse's plan and claim a corresponding tax deduction on their own tax return.
Generally, the spouse with the higher income will open a spousal RRSP account and make contributions on the other spouse's behalf.
The spousal RRSP is therefore registered in the name of, and belongs to, the spouse who earns less income.
A spousal RRSP is a way to contribute to your spouse's retirement, because contributions make it possible to equalize your joint retirement income and leave more money in your pocket when you start to withdraw income after retirement.
This tax vehicle is especially beneficial in situations where one spouse expects to receive much more retirement income than the other.