# spousal RRSP



## ibex (May 17, 2011)

Hello all, 

I am looking for some info on spousal RRSP, the main question is for example:
I contribute $20000 to my RRSP, this comes off my taxes and use my RRSP room, if I contribute to a spousal RRSP do I use my RRSP room if there is any, or am I using the room my wife has? I also have a DB plan. Ultimately trying to reduce my taxable income. Thanks in advance


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## Charlie (May 20, 2011)

Spousal RRSP uses your RRSP room and is a deduction on your taxes. You're subject to your RRSP contribution limits.


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## OhGreatGuru (May 24, 2009)

Like Charlie says. With a spousal RRSP you are the contributor and your wife is the annuitant. The spousal RRSP belongs to her and when withdrawals are made it will be taxed in her name (subject to the 3-year attribution rule.) It is a way of transferring retirement income to a the lower-income spouse. Not as important as it once was, now that pension income can be split between spouses.


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## ibex (May 17, 2011)

Thanks, I believe this answered my question, what I was getting at was if my income is 160000 vs 75000 with a decent amount of contribution room it would be better for me to contribute to the spousal RRSP, and mine, as it reduces my tax owing, is this correct thinking. As well if I contribute to the spousal, can my wife still contribute to her own RRSP under her own limits? Thanks again


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## cannon_fodder (Apr 3, 2009)

Yes your wife can use her contribution room to contribute to her RRSP. Just be careful if you set up a spousal RRSP and fund from a joint account. We have had no end of problems with ensuring the contributions are assigned correctly. 

If you and your wife contribute to her spousal RRSP you will be able to quickly grow her RRSP which can help eliminate administration fees and allow access to cheaper comissions (assuming it's a self directed RRSP).


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## OhGreatGuru (May 24, 2009)

cannon_fodder said:


> ...
> If you and your wife contribute to her spousal RRSP you will be able to quickly grow her RRSP which can help eliminate administration fees and allow access to cheaper comissions (assuming it's a self directed RRSP).


This has been discussed on other threads. Your spouse is allowed to combine her personal and spousal RRSP in one account, but it creates a real bookkeeping headache keeping track of what % was contributed by whom, and how much of it is restricted by the 3-yr. attribution rule for spousal RRSPs. It's likely not worth the work, and can be troublesome with CRA if you don't do it right. A lot simpler to keep them separate.


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## Karen (Jul 24, 2010)

My bank keeps personal and spousal RRSP and RRIF accounts separate forever, even in the case of the death of the annuitant. When my husband died in 2003, his personal RRIF was transferred directly to my RRSP, but his spousal RRIF, to which I was the contributor, was transferred to my RRSP but remains in a separate account and is still designated as a spousal RRSP.


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## OhGreatGuru (May 24, 2009)

This seems overly cautious, and I can't think of a reason for keeping them separate indefinitely, other than to simplify their archival paper trail. I also don't know why they would keep calling it a spousal RRSP - how can you be both spouse contributor and annuitant? Have you tried asking them to check with their corporate HQ why you can't merge it with your other RRSPs?


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## cannon_fodder (Apr 3, 2009)

OhGreatGuru said:


> This has been discussed on other threads. Your spouse is allowed to combine her personal and spousal RRSP in one account, but it creates a real bookkeeping headache keeping track of what % was contributed by whom, and how much of it is restricted by the 3-yr. attribution rule for spousal RRSPs. It's likely not worth the work, and can be troublesome with CRA if you don't do it right. A lot simpler to keep them separate.


Why would I worry about "% was contributed by whom"? I'd of course know the absolute $ amount because of the tax deduction. I also know about the 3 year attribution rule and that won't be an issue in our circumstance.

Once someone gets an account to a sizeable amount, they can open up another RRSP. For example, Scotia iTrade has more advanced trading platforms at $50k in assets (with reduced trading fees) and then again at $250k in assets. That would be across all accounts per person.


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## Karen (Jul 24, 2010)

> This seems overly cautious, and I can't think of a reason for keeping them separate indefinitely, other than to simplify their archival paper trail. I also don't know why they would keep calling it a spousal RRSP - how can you be both spouse contributor and annuitant? Have you tried asking them to check with their corporate HQ why you can't merge it with your other RRSPs?


I just checked my RRSP records and found that I was wrong - the official records don't refer to the second RRSP as "spousal" - sorry to have misled you. When I speak to my personal banking representative, she calls it the spousal account, and that's what confused me. I assume now that she just refers to it in that way informally to differentiate between the two accounts.

However, I have asked why it has to be kept separate after all these years, long after the attribution rules would have applied if my husband had still been alive. She told me that it's a general banking rule, not just Scotiabank's, and that it can't ever be merged with my own RRSP. Frankly the same bank has given me incorrect information about survivor's rights to joint GICs in the past, so I'm not convinced that they're right about this matter. In this case, though, it really makes no difference to me, so I haven't bothered to follow up on it.


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## Karen (Jul 24, 2010)

Following up on my last post to OGG, I checked on the Scotiabank's online record of my accounts and see that there they still refer to my second RRSP that was originally my late husband's RRIF as a "Spousal Registered Retirement Savings Plan." So that's where I got the idea that the bank still calls it a spousal account. You're right, though, OGG - how can I be both the spouse beneficiary and the annuitant? It makes no sense, but it did make me feel better to find that I didn't imagine they called it that! I'm going to ask for a further explanation when I'm next in the bank.


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## Maybe Later (Feb 19, 2011)

In Karen's case or in the OP's case, assuming the attribution was no longer an issue, I suppose there could be a small savings to combining accounts if an individual was paying annual fess to maintain each registered account separately. It may not ammount to big dollars, but why give it to the bank, particulalrly if the accounts were to remain open separately for many years?


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## Karen (Jul 24, 2010)

In my case, my RRSPs are all in GICs, so there are no costs involved. That's the reason I haven't questioned the bank about it, as it really makes no difference to me.


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