Spousal RRSP

Split your income and pay less tax as a couple.

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Reviewed by Paul Thorne

What is a spousal RRSP?

A spousal RRSP is a type of registered retirement savings plan (RRSP) that’s available to married couples and common-law partners.* It allows couples to transfer incomefrom one person to another which may lower the amount of tax they pay together.

* Throughout this page, the term “spouse” refers to both married couples and common-law partners.

Spousal RRSP benefits

Reduce taxable income

You can still claim an RRSP deduction when you contribute to your partner’s spousal RRSP. 

Tax planning flexibility

You get the ability to plan for lower taxes on retirement income with spousal RRSPs at any age.

Qualifying for government benefits

Moving income from the higher-income earning spouse to the lower-income earning spouse may reduce the likelihood that the higher-income earning spouse will be subject to any clawback of income-tested government benefits, like the OAS clawback.

How does a spousal RRSP work?

Spousal RRSPs are typically set up in the name of the spouse who has a lower income. If you have RRSP contribution room, you can contribute to your personal RRSP, to your spouse or common law partner’s spousal RRSP, or to both.

With a spousal RRSP, your spouse is the annuitant (the owner) of the account. They make investment decisions for the account and can withdraw funds from the account at any time. You can contribute to your partner’s spousal RRSP and claim the deduction based on your unused contribution room, but only the annuitant can make withdrawals from it. Be aware that withdrawals made within the first three calendar years may be taxed to you and not to your partner. See the three-year attribution rule.

Spousal RRSPs work best when one spouse earns more or has more savings than the other. They can also work well if you expect one spouse to have lower taxable income in later years (typically in retirement).

When a higher-earning spouse contributes to their partner’s spousal RRSP, the higher-earner gets a tax deduction. However, the spouse owns the spousal RRSP and can decide what investments the RRSP will have.

The goal in retirement is for each spouse to have an equal or similar income. This means the couple may pay less tax than if all their retirement savings had been owned only by one of them.

Consider this example:

The following example assumes typical tax rates for different income levels in Canada. Your tax benefits may vary based on your individual circumstances.

  • Spouse #1 earns a higher income and has a lot of money saved for retirement.
  • Spouse #2 earns a lower income and has less money saved for retirement.

Two scenarios for withdrawals in retirement

If the couple wants to withdraw $70,000 per year during retirement, how they make those withdrawals directly impacts how much income tax they pay.

Scenario Who withdraws? Total withdrawn Tax outcome
Scenario 1 Spouse #1 only $70,000 Higher tax rate on $70,000 for Spouse #1
Scenario 2 Both spouses ($35,000) each $70,000 Lower tax rate on $35,000 for each spouse
  • Scenario 1: Spouse #1 withdraws the entire $70,000 from their RRSP. 
    • Tax outcome: Spouse #1 pays income tax on the full amount. This could put them in a higher tax bracket, meaning they lose more of their savings to income tax.
  • Scenario 2: Spouse #1 contributes regularly to Spouse #2’s spousal RRSP, and the couple splits the withdrawals evenly.
    • Tax outcome: Instead of one person withdrawing $70,000, each spouse withdraws $35,000 from their respective RRSPs. 
    • Benefit: 
      • Both people benefit from the basic personal amount ($15,705 for most taxpayers in 2024). This is a non-refundable tax credit that both spouses could claim.
      • By splitting withdrawals, each spouse pays tax on $35,000 rather than one person being taxed on $70,000. This may lead to both spouses’ income being taxed in a lower tax bracket, meaning they might pay less income tax, keeping more of their retirement savings.

Important consideration: Attribution rules

Withdrawals from a spousal RRSP must not trigger the three-year attribution rule to avoid taxation back to the contributing spouse. 

Connect with an advisor for more information

Spousal RRSP investment options at Sun Life

Build an investment portfolio with the right mix of investments like mutual funds, segregated funds, GICs, and more.

Mutual funds

A mutual fund combines the money from many investors into a pool. These pools of money are invested in stocks, bonds, or other securities. Each pool is managed by a professional investment manager.

Learn more about mutual funds

Guaranteed interest products

We offer two types: Guaranteed investment certificates (GICS) and insurance GICs. Your principal and interest are guaranteed, safeguarding you from changes in the market.

Learn more about guaranteed interest products

Segregated funds

A segregated fund is an investment fund that combines the growth potential of a mutual fund with the estate planning benefits of a life insurance contract. You can buy a segregated fund contract that offers guarantees and some additional benefits which can help protect your investments.

Learn more about segregated funds

Annuities

A payout annuity offers guaranteed income for life or a specified period. To help meet your retirement income needs, you might want to purchase a payout annuity to get guaranteed income from your RRSP.

Learn more about payout annuities

Exchange Traded Funds (ETFs)

ETFs are investment products that track an index or a basket of securities (generally stocks and bonds).  Like stocks and mutual funds, ETFs can be traded throughout the day on a designated exchange.

Open a spousal RRSP

Our advisors are ready to help you open a spousal RRSP so that you can start saving together as a couple. They can also answer any questions you may have.

Find an advisor

Contributions, Withdrawals and Attribution rules

You get a tax deduction on the contributions you make to your partner’s spousal RRSP.  But it’s important to note that you’re using your contribution room to make the spousal RRSP contributions. Your contributions to the spousal RRSP won’t affect your partner’s RRSP contribution room, and you can’t use their contribution room to get a deduction for yourself.

After you’ve made a spousal RRSP contribution:

  • The money belongs to your spouse. They control the account, make the investment decisions, and decide when to withdraw the money.
  • You can contribute to a spousal RRSP until Dec 31 of the year your spouse turns 71. Let’s say you're over age 71, so you can’t contribute to your own RRSP anymore. But if your spouse is still under age 71, and you still have RRSP contribution room, you can contribute to their spousal RRSP.

Regardless of the type of RRSPs you contribute to, you’re still responsible for staying within your RRSP contribution limit. Otherwise, you may face penalties for over-contributions.

With spousal RRSPs, there’s a three-year attribution rule that may apply when your partner makes a withdrawal from their spousal RRSP. 

So how does that work? Let’s say you make a contribution to your partner’s spousal RRSP this year. Under the attribution rule, if your partner makes a withdrawal in the current year or the next two years, then you (the contributor) may be taxed on the withdrawals.

Connect with an advisor or tax advisor for more information.

Since your partner is the owner of a spousal RRSP, they’re the only person who can make withdrawals from it. They can withdraw from a spousal RRSP at any time, subject to the three-year attribution rule, they’ll have to pay tax on those withdrawals.

For any type of RRSPs, it’s often recommended to make withdrawals later in life – as many people find themselves in a lower tax bracket in retirement. Being in a lower tax bracket means you’ll pay less tax on your RRSP withdrawals.

Spousal RRSP FAQs

The contributor to the spousal RRSP claims the tax deduction, not the owner of the spousal RRSP. 

For example, let’s say you contribute to a spousal RRSP owned by your partner. Since you’re the contributor, the RRSP contribution receipt is issued to you, not to your partner. So, you’ll get the tax deduction.

It’s 18% of your earned income, up to a maximum of $32,490 (the annual limit for 2024), plus any unused contribution room from previous years, less amounts that you and your employer have contributed to your group RRSP or registered pension plan. 

Check your most recent Notice of Assessment, log into the Canada Revenue Agency (CRA) website, or call the CRA to find out your contribution limit. 

Keep in mind, your RRSP contribution limit is the same regardless of how many RRSP accounts you have. For example, let’s say you plan to contribute to your partner’s spousal RRSP, your group RRSP, and your personal RRSP. If your contribution limit is $30,000, you can divide that amount between all three of the RRSP accounts. But you can’t contribute $30,000 to each of those three RRSPs.

You can't transfer any part of your personal or spousal RRSP to anyone else, including your spouse. However, you can combine your own personal and spousal RRSPs into one RRSP. If you do, though, the combined RRSP will be treated as a spousal RRSP. 

Connect with an advisor for more detailed information

If you’re the owner of a spousal RRSP, you can withdraw from it at any time. But keep in mind that either you or your spouse will be taxed on your withdrawals.

If you make a withdrawal during the three-year attribution period: Your spouse will be taxed on your withdrawals, but only to the extent of the contributions they made. You’ll be taxed on the rest, if any.

If you make a withdrawal after the three-year attribution period: You’ll pay tax on the entire withdrawal.

For example, let’s say your spouse contributed $3,000 to your spousal RRSP within the three-year attribution period. You withdraw $5,000 during those three years. In this case, they’ll be taxed on the $3,000, and you’ll be taxed on the remaining $2,000.

In some cases, nothing may happen to a spousal RRSP if there’s a divorce. 

In most Canadian provinces and territories, the value of property (including RRSPs) the spouses accumulated during marriage is split equally when their marriage breaks down. 

The spouse with the larger value gives the other spouse an equalization payment equal to half the difference. There's no requirement for assets to be split, but the law provides a mechanism for part or all of an RRSP or spousal RRSP to be transferred from one spouse to another on a tax-deferred basis following from a judicial order or if the spouses agree in a written agreement as part of the process. 

Note: These division of property rule applies to those who are married in most provinces and territories, not to those who are in common-law relationships.

Please consult with a legal and tax professional for more information.

No, there isn’t. You can’t contribute to your spouse’s TFSA in the same way that you can contribute to their spousal RRSP. However, you can gift your spouse money to contribute to their own TFSA.

Yes, spousal RRSPs offer benefits beyond pension income splitting available in retirement.

Spousal RRSPs transfer future income (that would have otherwise been taxed in the hands of a higher income-earning spouse) to be taxed in the lower income-earning spouse’s name. This may allow retirement withdrawals to be taxed at the lower-income spouse’s rate, which may result in a tax savings for the couple together.

Unlike pension income splitting, which has age restrictions and eligible pension income rules, spousal RRSPs provide flexibility and can be used at any age. This can be valuable for couples planning for: 

  • early retirement or
  • situations where one spouse has irregular income throughout their career or
  • retirement where you expect one spouse to have lower taxable income in later years.

Spousal RRSPs can complement pension income splitting by providing an additional option to consider for tax-efficient retirement planning.

Speak to a tax advisor for more information. 

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This information is meant for educational and illustrative purposes only. Some conditions, exclusions and restrictions apply. Last updated: February 19, 2025.

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