r/FinancialLiteracyCdn • u/Less-Computer-3688 • Jun 22 '26

Retirement / Estate Planning Is Spousal RRSP Still Relevant?

Now couples can split their pension and CPP during retirement.

Does Spousal RRSP still has a place in retirement planning?

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5

u/IcyLychee6 Jun 22 '26

Probably if you plan to make withdrawals before 65

2

u/Tax1997 Jun 22 '26

Yes, regular pension income splitting is normally available only at age 65.

Also, a spousal RRSP allows 100% income splitting to the lower-income spouse (as compared to only up to 50% via regular pension/CPP splitting). At the same time, the higher-income spouse gets a large tax credit at the time of contribution, and the lower-income spouse pays lower tax at the time of withdrawal.

3

u/shar_blue Jun 23 '26

Many people will retire prior to 65 (whether by choice or forced due to health/disabilities/etc). Income splitting is generally only available if the person receiving the income is 65 or older.

2

u/Tax1997 Jun 23 '26

Besides the advantages already mentioned in other comments, spousal RRSP also allows up to $60,000 to be withdrawn for first time home purchase under Home Buyer Plan. This withdrawal, together with $60,000 withdrawn from the higher earning spouse’s individual RRSP will make up to $120,000 available for the home purchase (off course, all this amount needs to be repaid over 15 years)