Thread: Spousal RRSP
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Old 04-09-2018, 01:13 PM   #3
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Originally Posted by Izzle View Post
I have a question regarding Spousal RRSPs and figured this would be the best place to ask.

I have a personal RRSP (regular contributions) as well as a spousal RRSP in my wife's name (sporadic contributions). I have a matching RRSP plan with work and have the higher income in the marriage. As it stands currently, my RRSP is 3 times that of my wife's.

Over the weekend, we met with another couple in a similar situation as us (one spouse is higher income earner). They mentioned that they try to keep their RRSPs as close as possible to each other. They figure, in retirement, it's better for two people to withdraw $25,000 each rather than one giant $50,000 withdrawal from the bigger RRSP. They would save on taxes.

My question is, is that really the case? And if so, should I stop making contributions to my own RRSP and instead contribute to my wife's? Once both RRSPs are similar, I'll continue making equal contributions to both RRSPs.
Yes, because marginal tax rates increase as income increases so in retirement you want both spouses to have relatively equal savings that they draw at a relatively equal pace.

Having one spouse with all of the savings and another with none poses taxation problems, there are other factors at play there like Pension Splitting and Dependent credits, etc, but generally you will be better off with equal RRSP savings.
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