Setting up a spousal RRSP account and making contributions to it in the name of your lower-earning partner is a powerful tax-saving tool. You get exactly the same advantage you would have got if you were putting money in your own RRSP (a tax refund), but when the money is withdrawn it’s taxed at your lower-income spouse’s rate. Just don’t forget the CRA’s attribution rules: If, say, you contributed to a spousal RRSP for your wife in any of the previous three years and she makes a withdrawal this year, it’s taxed on your tax return instead of hers. Plus, the total combined contribution to your own RRSP and your spouse’s cannot exceed your own deduction limit.
The bottom line: Spousal RRSPs allow couples to shift savings from the big earner to the smaller one so that retirement income is taxed at a lower rate—a great way to add some shine to your golden years.