RRSP Q&A: What can my wife withdraw without incurring tax? - MoneySense

RRSP Q&A: What can my wife withdraw without incurring tax?

Answers to your RRSP questions.


From February 16 to 19, 2010, MoneySense.ca’s top financial planners are answering your RRSP questions. For the full list of questions answered — or to submit a question of your own — click here.

I am making $80,000 per year. My spouse stays at home. She has $34,000 in her RRSP. If she wants to withdraw money from her RRSP, what amount can she withdraw per year such that it does not incur any tax on her and on me (if possible)? — K.M

Karin Mizgala: Your wife can withdraw up to $10,382 in 2010 before incurring any tax. You however, would lose the ability to claim some or all of the “spouse or common law partner amount”. For example, if your wife withdrew the full $10,382 from her RSP, you would completely lose the “spouse amount” and pay about $2,000 more tax on your income of $80,000. If she only withdrew $5,000, you would be able to claim a portion of the “spouse amount” but you would still pay about $1,000 more in tax.

Assuming you aren’t in retirement yet, I would advise against withdrawing from your RSP prematurely unless it is a dire emergency or you are certain that you will have other sources of income to meet your lifestyle needs when you do retire.

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