# Spousal RRSP being rolled into regular RRSP



## recklessrick (Jun 16, 2013)

Hi there,

My wife has a ~$2000.00 spousal RRSP account at TD waterhouse that holds one fund: golden opportunities. They are maturing quite soon (eight year maturity period) and can be redeemed or transferred or reinvested. I don't want to reinvest in golden opp and that's the only holding in here spousal RRSP. 

After maturity, what I'd like to do is redeem or transfer the amount of the investment into either her regular RRSP account or mine, whichever we can. Then I can close the spousal account and save the $100 fee as well as making things simpler.

Questions are: 

Because it's a spousal, does this affect where we can transfer it?
If I just redeem the amount into cash, does anyone know what the tax implications are of that? I'm selling an RRSP so I assume I'd have to pay the tax credit back on that one?


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## Eclectic12 (Oct 20, 2010)

I haven't investigated so unless someone else has experience - this may not be accurate.

From a gov't perspective - I suspect they only care that the transfer stays with the owner, your spouse. What the financial institution allows as part of the plan setup, may be different.

As long as the sale is in an RRSP and the transfer is to an RRSP (i.e. not a withdrawal), I don't see why there would be any tax implications.


Since you are referring to you paying the tax credit - I suspect you are thinking of the attribution rules that apply to withdrawals. On a withdrawal made in less than three calendar years after the last contribution - the withdrawal would be reported on your tax return as income instead of your spouse's tax return. Again - as you are talking about a transfer, I don't believe this would apply.

http://www.tdcanadatrust.com/planni...trategies-tips/using-spousal-rsps/spousal.jsp
http://www.milliondollarjourney.com/how-spousal-rrsps-work.htm


Cheers


*P.S.* Has the situation changed so that you can no longer take advantage of the spousal RRSP?


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## recklessrick (Jun 16, 2013)

Thanks for the I sought and links.

Yes, the situation has changed. I am the only income, have been for the last 5 years and will be for quite a while until the kids leave home.


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## Spudd (Oct 11, 2011)

But if you're the only income, then it makes sense for you to contribute to her spousal RRSP. This will save you taxes later when it comes time to withdraw from the RRSPs. (I know income splitting is a current law, but it may not be any more by the time we retire.)


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## recklessrick (Jun 16, 2013)

So I could contribute to her spousal RRSP account using my RRSP contribution room? I thought she had to have income as as well for me to contribute to her account. If she doesn't, then it would make sense for me to contribute to her spousal. I'd get the same tax break now and, like you said, we'd save taxes in our retirement years.

UPDATE: I read a number of pages about spousal RSP and it seems totally fine for me to use my contribution room and to contribute to her spousal account. I have a bunch of room to contribute so I might as well divide it up between us to keep that retirement income tax bill down. 

ANOTHER question  Should I maybe contribute to her spousal with more share of my RRSP room? I have a pension through my company so that would give me a higher retirement income. If I put more of my contribution room in her spousal, that would go farther to even the tax bill later....?


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## birdman (Feb 12, 2013)

I am certainly not an expert on the subject by I too have a spousal RSP for my wife and she also has her own and I have mine. We are both retired but have not yet started to withdraw our RSP's. I too would like to get rid of the spousal RSP and tsfr it to my wifes RSP but if I recal the financial institution would not let me do it. Can't recall why but there was a risk to them which I understood at the time I made the enquiry. This is probably not much help but I believe it is a financial institution regulation rather than a tax or governmental one.


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## Spudd (Oct 11, 2011)

Yes, by all means contribute more to her spousal than to yours.


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## MrMatt (Dec 21, 2011)

I don't believe you can convert a spousal RRSP to a normal RRSP, except on death.


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## stardancer (Apr 26, 2009)

A few years ago, I had my regular RSP (larger) combined with my spousal RSP (smaller); TD wouldn't/couldn't do it the other way around. Then when I made my regular contribution, I had to check off whether it was a regular or spousal deposit. Since it was always a regular contribution, I received a regular receipt. I think this was not allowed or possible several years ago, but with better technology, the system can keep track. I had to roll the whole thing into a RIF this year, but any withdrawals won't be attributed back to my husband since it's been at least 20 years since the last spousal contribution.

If you are planning on continuing the spousal contributions, I would keep them separate so it doesn't get confusing. Then when you get closer to the time to start drawing down, combine the two of them.


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## Eclectic12 (Oct 20, 2010)

recklessrick said:


> So I could contribute to her spousal RRSP account using my RRSP contribution room?
> I thought she had to have income as as well for me to contribute to her account.


From CRA's web site:


> Contributions you make to a spousal or common-law partner RRSP reduce your RRSP deduction limit.


Since the RRSP deduction limit controls whether money can be put in or not, there's no need for the spouse who owns the RRSP to have income. They would need income to put money into their own RRSP.

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/cntrbtng/spsl-eng.html
http://gailvazoxlade.com/blog/archives/4563





recklessrick said:


> If she doesn't, then it would make sense for me to contribute to her spousal. I'd get the same tax break now and, like you said, we'd save taxes in our retirement years.


 ... which is the point.


Cheers


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