How does a spousal RRSP withdrawal work? Feb 8th

How to go about securing the best Retirement Plan in Canada.

Latest News

Stock news: Cogeco takes U.S. telecom hit as Electrovaya rallies Jul 18th

Here’s a round-up of news for Canadian investors this week. Cogeco Electrovaya Blue Ant Media Loblaw-EQB Featured RRSP Accounts featured EQ Bank Build your retirement saving.... More »

What is the Canada Pension Plan death benefit? + MORE Sep 26th

Ask MoneySense Your recent article is the first time I have seen reference to a CPP death benefit of $2,500. Can you explain it, please? —Sam The primary purpose of the Canada Pension Plan (CPP) is to pay a retirement pension to contributors. Employers as well as employed and self-employed .... More »

The best RRSPs in Canada for 2026 + MORE Jan 31st

Why should you open a registered retirement savings plan (RRSP)? This account type is often described as “tax-advantaged,” meaning it offers a tax-efficient way for savers and investors to build wealth for the future, usually for retirement. To maximize its potential, it helps to know the differ.... More »

Financial independence and travel: Can you have both? + MORE Apr 25th

In February and early March, as is increasingly our custom, my wife Ruth and I spent five weeks in a sunny clime in order to avoid the tail end of Canada’s winter. On our return from Malta, regular guest blogger Devin Partida contributed a relevant article titled “Can you pursue financial indepe.... More »

Should you sell stocks you inherit? + MORE Sep 12th

An inheritance can be comprised of cash, securities, real estate, or other assets. When you inherit securities like stocks, there are income tax and strategic considerations. Here are some that you should keep in mind. How are stocks taxed when you inherit them? When a spouse or co.... More »

How does a spousal RRSP withdrawal work?

– moneysense.ca

I bought a spousal RRSP in December 2019 and I plan to withdraw from it this week. Is it considered to be my income or my spousal income? I called CRA four times but no one could answer this question for me.—Tom

Spousal RRSP withdrawal rules: Timing matters

Tom, the rules around the timing of spousal registered retirement savings plans (RRSPs) can be confusing. If you don’t time the withdrawal correctly it may be taxed in your name rather than your spouse’s name, which is not what you want.

Let me see if I can clear this up for you and then I’ll give you some ideas on why a spousal RRSP is a good income splitting tool.

To answer your question, when you make a spousal RRSP contribution you have to wait two full calendar years, with no contributions, before you can make a withdrawal that is taxed in your spouse’s hands.

In your case, Tom, you made a contribution in Dec. 2019. You didn’t make a contribution in 2020 or 2021 which means if your spouse draws from the spousal account in 2022, he/she will be taxed on the withdrawal, not you as the contributor…

Continue Reading On moneysense.ca »

Getting the most out of your Retirement Plan in Canada can be tricky – let us help! Visit our Retirement page for the latest advice and articles.

Share