An easy guide to income splitting for seniors Apr 14th

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Q. My husband and I are both retired. He still has income from his business, and I have cashed in all of my RRSPs but one. My question is: Can Hubby cash one of his RRSPs (and pay taxes, of course), but then turn around and buy a spousal RRSP for me? Would that be worth doing? Then I could cash this spousal RRSP the following year.
— Cindy
A. Registered Retirement Savings Plan (RRSP) contributions are tax-deductible and withdrawals are taxable. The right mix of contributions and withdrawals—and timing them both—are key.
If your husband takes an RRSP withdrawal of, say, $10,000, and then contributes $10,000 back to an RRSP, Cindy, there’s no net impact on his taxes. He’ll have $10,000 more income, and a $10,000 deduction to reduce that income. He doesn’t need to deduct the RRSP contribution in the year he contributes; a taxpayer can contribute, and then save the deduction for that contribution for a future yea. But in your example, it sounds as though he would contribute and deduct that RRSP contribution in the same year…

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