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How SPOUSAL RRSPs Work

Good morning! I received some reader mail and I’ve been asked to write about spousal RRSP’s. Here it goes..

What is a Spousal RRSP?

  • A spousal RRSP is where one spouse makes an RRSP contribution but the other spouse owns the plan.

Why would a married couple contribute to a spousal RRSP?

  • Not all married couples should use a spousal RRSP. This only makes senses if one spouse makes significantly more income than the other.
  • It provides a means of income splitting. Here in Canada, legit ways to income split are not easy to come by.
  • The reason for incoming splitting is so that during retirement, both spouses will have approximately the same income thus reducing income tax.

How does it work?

  • In a spousal RRSP, the higher income spouse will contribute to the plan. The higher income spouse can then claim the tax deduction.
  • For all intents and purposes, the money within the spousal RRSP now belongs to the lower income spouse.
  • The main caveat being that the lower income spouse cannot withdraw from the plan for 2 calendar years (Jan 1-Dec 31) after the last contribution (up to 3 calendar years depending on when you open the account). Otherwise, the withdrawal will be taxed in the hands of the contributor.
  • For example, if I contributed $10,000 into a spousal RRSP in May 1, 2011, then my wife can withdraw the $10,000 on Jan 1, 2014 and be taxed in her hands.  To reduce the overall wait time, I could contribute to the spousal RRSP on Dec 31, 2011, and withdraw on Jan 1, 2014 bringing the total wait time of 2 years.

Where can I open an account?

Most discount brokerages will have an option for a spousal RRSP.  Here is our discount brokerage comparison.  Note that our readers have voted Questrade as their favorite brokerage which is where we have opened our most recent RRSP trading account.  You can read our full Questrade Review here.

Personally, we don’t use spousal RRSPs because my wife and I both have approximately the same salary. However, if we decide that it would make sense for my wife to become a stay at home Mom, then you can be assured that we will use this strategy.







127 Comments, Comment or Ping

  1. 1. Steve

    In regards to your statement: “This only makes senses if one spouse makes significantly more income than the other”.

    It is important to note that this should not be interpreted as: “You should have a spousal RRSP if one spouse makes significantly more income than the other.”

    There are cases where even in this circumstance it does not make sense to have a spousal RRSP. The key point to keep in mind is that you are using up your allowable contribution room in your RRSP when you contribute to your spouses. (If I am wrong on this let me know, but I have been told this by 2 sources.)

    If you have a case where your spouse makes less money than you but neither of you has a pension, a spousal RRSP makes no difference.

    Similarly if you make more than your spouse but he/she has a pension. A spousal RRSP will actually be worse.

    If you make more money than your spouse, you have a pension, but your spouse doesn’t. It definitely makes sense to contribute to a spousal RRSP.

    But I think the government was going to allow income splitting for retirees. In which case it makes the whole point of spousal RRSPs moot, unless you and your spouse plan on retiring early.

  2. Steve: Thanks for the analysis! I should have been more clear in my article. I assumed that spousal RRSP’s worked best for stay at home spouses (ie. very low income).

  3. 3. Jeff Mackey

    Current income may not be as big of a factor as anticipated retirement income. Maybe one spouse is anticipating a company pension than the other. Spousal RRSP contributions can make sense in this situation if incomes are equal.

  4. 4. Mike

    Steve – you are right – contributions to a spousal account use up the contribution room of the person making the contribution.

    With income splitting it’s pretty debatable if these accounts are worthwhile anymore. Even if you are planning early retirement and one account is bigger than the other – if there is enough $$ in the smaller account to support equal withdrawals until age 65 than you don’t need the spousal.

    Having said that, if you already have one (as I do) then it does no harm to continue contributing to it.

  5. 5. Mark

    Stay at home strategy:

    (1) high-income spouse pours money into spousal RRSP
    (2) wait 2 years
    (3) low-income spouse takes the money out as income uses it to pay household expenses

  6. 6. Mike

    Mark – don’t forget you would give up the spousal/dependant credit if you create income for the stay-at-home spouse. In our case it’s about $1800 for last year.

  7. 7. Traciatim

    Maybe I missed something, but didn’t the recent budget changes make it so that retirees can split income anyway? Doesn’t that make this strategy much less valid now?

  8. Traciatim: Current income splitting for retirees is for pensions ONLY, not RRSP yet.

  9. 9. Qubikal

    Mark: Can you explain why step (3) of Stay at home strategy is for the lower income spouse to pay for household expenses?

    Normally, you would want the lower income spouse to invest the money and have the higher income spouse to pay for the expenses. The thought is that the investment income would be then taxed at a much lower rate. (assumes that you’re not employing the Smith Maneuver)

  10. 10. Magnum

    It was stated that the spouse can’t withdrawl for 2 years. Is the HBP exampt from that provision? Would a 90 day withdrawl be possible?

  11. 11. Mike

    Magnum – the spouse can withdraw within 2 years but then it’s taxable in the hands of the contributor – not her.
    HBP funds have to be in the rrsp for at least 90 days.

  12. 12. Jack

    Another consideration that I didn’t see mentioned for contributing to a spousal RRSP is to balance out the RRSP holdings of each spouse. In our case, I had started working and contributing to my RRSP before my wife did (I’m 4 years older and a little more financial savvy) and have ~5x the RRSP holdings that she has. So our spousal plan is to balance out our repsective RRSP holdings faster. I also earn a higher income right now and she will be going on mat leave in a few months, so this way I can continue to contribute to her RRSP while she is not working and earning little income.

  13. 13. Mark

    I wasn’t thinking of retirees – I was thinking of my own situation: I work, though not making much, and my wife is a stay-at-home mom with no income.

    Mike: is there an income threshold for the spousal/dependant credit?

    Qubikal: Yes – that would be better, assuming you can pump enough money though the RRSP

  14. 14. Mike

    I don’t know if there is a threshold for the spousal credit.
    I make around 100k and I got about $1800 last year from it.

  15. 15. bakeappled

    FrugalTrader –

    Just to clarify how the current income splitting for retirees:

    Eligible pension income

    For individuals aged 65 years and over, the major types of qualifying income that can be allocated to a spouse or common law partner are:
    * a pension from a registered pension plan (RPP) ;
    * income from a registered retirement savings plan (RRSP) annuity; and
    * payments out of or under a registered retirement income fund.
    For individuals under 65 years of age, the major type of qualifying income that can be allocated to a spouse or common law partner is income from a pension from a registered pension plan.

  16. 16. bakeappled

    Even with unlimited retirement income splitting, a case where a spousal RRSP can still be worthwhile is when there is an age gap.

    An older spouse who can no longer contribute to their own plan can still contibute to a spousal plan if they have contribution room. The more tilted the nest egg is towards the older spouse, the bigger the saving will be. The older spouse will reduce their tax bill, legally transfer assets to spouse, and defer tax (even better if the younger spouse will have a lower tax rate).

  17. Retirement splitting or not, spousal RRSP contributions should be done today where possible. My marginal tax rate is about 46%, my wife’s is about 32%. Even if the government does offer splitting in the future of RRSP’s during retirement, this is a no-brainer today where possible.

  18. 18. sam

    the main advantage of RRSP is tax deffered growth..more years your funds stay in RRSP,greater the benefit..but once you complete 69 years(i think it’s being changed to 71)..you have no choice but to make withdrawals..
    so if your spouse is younger than..she is going to turn 69 a few years after you..so the funds can remain in RRSP for those extra years…..one more advantage of spousal RRSP

  19. 19. Ed Rempel

    FT – The key with spousal RRSP’s is to try to income split after you retire. The goal is to have similar taxable incomes after you retire. Consider any pensions, how much CPP each would likely get, investment and any other income either of you may have, and how much you each have in RRSP’s and try to even your incomes.

    If your incomes are similar, neither of you has a pension and you are paying similar amounts into CPP, then generally you should try to keep your total RRSP’s about equal. If one spouse has noticeably less in RRSP, then you can get them closer with a spousal RRSP.

    This is a separate decision from which one should make an RRSP contribution, which is based on your incomes and tax brackets today.

    The retiree income splitting rules are new and may change in the future and don’t apply to all types of income. There is no disadvantage of using a spousal RRSP, so it is still generally smart to plan the same for equal retirement incomes.

    Mark – Your strategy sounds good, but Mike is right that the spousal tax credit generally wipes out the advantage. It is a credit based on the lowest tax rate up to $7,500 of income (2006), which is almost the entire personal tax credit. Essentially, you or your spouse will pay 22% tax on any income she makes – including a withdrawal from a spousal RRSP if she has no other income.

    Ed

  20. 20. Mike

    Ed: I keep hearing conflicting info on what type of income is eligible for splitting. I believe that payments from a RRIF are eligible for splitting but what about from an RRSP? I’ve heard yes and no in various media.

    It’s not an overly important question since it’s no big deal converting part of an rrsp to a rrif but I’d like to know the facts!

  21. 24. TL

    Hi FT, Thanks for posting this informative article I think it’ll be very helpful for my current and future situation.

    That said, I have one question: When opening up a spousal RRSP account, would I open the account under my spouse’s name (assuming that I would be the one contributing to her account) or would it formally be under my name and would I have trading authority over her account?

  22. TL, the application process really depends on your brokerage. In my eyes, if you pick spousal RRSP, the application process should be self explanatory. There should also be a section to name alternate trading authority.

  23. 26. jie

    The “three-year rule” applies to spousal RRSPs regardless of when, or to which financial institution, contributions were paid.
    However, this rule does not apply to withdrawals under the Home Buyers’ Plan (HBP) or the Lifelong Learning Plan (LLP).
    source: http://www.dsf-dfs.com/en-CA/Prtclrs/CnsltCntrFrmtn/CntrRrRtrt/REER/RglsRR.htm#WithdrawalfromtheSpousalRRSP

  24. 28. nobleea

    I’m still not clear here. RRIFs qualify under the pension splitting in retirement. Am I to assume that spousal rrsps are now a little unneccesary? It’s just semantics and paperwork.

  25. 29. Traciatim

    You are correct nobleea, RRIF income can be split which diminishes the spousal RRSP contributions worth. However there may be other reasons to continue keeping the RRSPs value even between spouses, one of them being that we don’t know what the rules will be when we retire.

    I asked a similar question over on Preet’s site wheredoesallmymoneygo.com . . . link below:

    http://www.wheredoesallmymoneygo.com/ask-a-question/post/331424

  26. Nob, you are right. RRIF withdrawals qualify as pension income, so yes, spousal RRSP’s don’t serve much purpose in the case of traditional retirement. However, I believe the earliest you can open an RRIF is 55, so the spousal RRSP can work well for those who decide to retire early.

  27. 31. Peter McCarthy

    under what circumstances should one do a spousal RRSP? I went to scotia on friday and they told me that i shouldn’t do this until i’m 40 or 50. I’m 30.

    my wife makes about 40K less than me is that enough to take advantage of spousal RRSPs? What do you think

  28. 32. Ed Rempel

    Hi all,

    Spousal RRSPs can still be useful, since not nearly all income in retirement can be split.

    The purpose of spousal RRSPs is to try to keep the taxable income or 2 spouses similar in retirement. Your higher income is only one factor, Peter. You should look at all factors and project what your retirment incomes are likely to be.

    Consider your total RRSP’s vs your wife’s, how much pension income you may get from your jobs or the government, and any other income or investments either of you may have now or before you retire.

    The Scotia person’s answer is simplistic and shows they don’t understand at all. Age is not really relevant, except that it is sometimes easier to project your retirement incomes when retirement gets closer.

    Regular RRIF income and pensions can be split, but not most other income, including investment income, lump sum withdrawals from RRIFs or RRSPs, employment income or other retirement benefits. So, having some of your retirement income split does not necessarily mean your taxable incomes are effectively split.

    As FT mentioned, the split only applies at age 65 and not to anyone that may retire early.

    Because of these factors and because the rules may change again, we still consider it adviseable to use spousal RRSPs to plan to equalize our clients’ retirement taxable incomes.

    If you both don’t have a pension or any other specific income you expect in retirement, and if you expect similar amounts for OAS & CPP, then it is relatively simple and you should try to keep the total RRSPs in each of your names at similar levels.

    Ed

  29. 33. al

    simply put :

    income:
    1-husaband 155,000 $
    2-wife : no income

    Sousal RRSP:
    opened dec/2007 for 20,000 $

    if, withdrawed on jan/2010

    then how much can she withdraw (net) ?

    thank you

  30. al, your wife can withdraw as much of the RRSP as she likes. The biggest question is WHEN she withdraws the funds relative to when the funds were first deposited. As indicated in the article, your wife can withdraw the funds 2 calendar years from deposit and the money will be taxed in her hands.

    In your scenario, it “seems” like you may pass the test. However, I would double check with a tax professional to be sure.

  31. 35. al

    thank you FT for your rersponse,
    so, if my wife withdraw 5000$$ jan/2 and another 4000 the very next day minus the refundable 10% withholding tax,
    would this affect my spousal tax credit when i file for my tax then?
    p.s if yes,based on the total income , how much would i lose ?

  32. Al, the RRSP withdrawal would be counted as income, so yes, it would reduce your spousal tax credit.

    See these posts for more info:
    http://www.milliondollarjourney.com/stay-at-home-with-the-kids-or-work.htm
    http://www.milliondollarjourney.com/spousal-amount-uccb-and-cctb.htm

  33. 37. Michael Wood

    If you do the income split with low-income spouse, it seems to me to make sense to do the following:

    ALL RRSP Contributions go to Spousal until it’s approx $35k (or double that, your choice).
    …Wait 2 years
    Pull $35k from Spouse (as income) year 1
    Pull $35k from Spouse (as income) year 2

    Rinse and repeat. Lather if necessary.

    WHY $35k? This maxes the lowest marginal tax bracket for the high-income person, making their “effective taxes” 16% for that initial $70k, then a big jump of course for the subsequent dollars.

    This is a heck of a lot better than a measly $1600 dependent claim.

    Canada: The land of “Individual Taxation” when beneficial to Revenue Canada, and the land of “Family Taxation” for benefits to the family (GST Rebate etc). Expletives deleted.

  34. 38. Rose

    what happens to the funds that are in a spousal rrsp on marriage breakdown

  35. 39. Chuck

    Rose: They’re still considered a matrimonial asset and as such would be included in the assets to be divided at the time of a marriage breakdown.

  36. 40. Rej

    Can someone explain what happens to contribution room in a spousal RRSP. I understand the contributing spouse needs to have the room to contribute to his/her spouses RRSP but does this only affect the contribution room of the contributing spouse or do both get affected.

    Thanks

  37. 41. cannon_fodder

    Rej,

    Contributing to your spouse’s RRSP only affects your contribution room.

  38. 42. Elman

    please help me, do they track which contribution my spouse take out from the spousal rrsp. example: I put 5k 3 years ago on the spousal rrsp which is locked in a 5 year GIC at ING. this year I will put 2k into the spousal rrsp and will only put it in a high interest rrsp ING savings account. So now my spouse has a total of 7k in her spousal rrsp. If my spouse a month later took out 2k from the spousal rrsp savings account, will that 2k be considered her income or mine ?

  39. 43. nobleea

    Elman;

    The income would be considered yours under attribution rules. It would only qualify as her income if she took it out 3 years after the last contribution you made.

  40. 44. Elman

    Thanks Noblea.
    How about this example
    I contributed to the spousal rrsp:
    Jan 2000 – $5000
    Jan 2001 – $5000
    Jan 2002 – $5000
    Jan 2003 – $5000
    Jan 2008 – $2000
    my wife withdrew $15000 on March 2008. Is the $15000 considered her income or mine ?
    or maybe its considered $13000 her income and $2000 mine ?

  41. 45. nobleea

    i believe 13K would be considered her income and 2K would be yours under attribution rules.

  42. 46. al

    hi FT,

    i just received “RRSP INFORMATION FOR 2008″

    on my last “Notice of assessment” my RRSP limit was 15619 for the tax year of 2008

    but on this RRSP DEDUCTION LIMIT STATEMENT THAT I RECEIVED YESTERDAY IT SAID AT THE BOTTOM:

    RRSP DEDUCTION LIMIT FOR 2008 ……….. $41,177 (a)

    P.S 2008 total pension adjustment reversal … $25,558

    so my question ,should i go and use my 41,177 and get my fat deductions or just stick to 15,619 that i already used in my rrsp invest. account !

    thank you

  43. 47. LostMan

    Hey I wonder if you could give me some advice?I am 42 years old wife is forty one.I make 65000 a year she makes 25000.We just paid of our mortgage, and want to start an RRSP for her(I have a company pension)she has none.Should I contribute to spousal RRSP?

  44. 48. DAvid

    LostMan,
    Do you mean you want to use the small amount of RSP room you have left after your company pension contribution reduces it, thus lowering your taxes, or do you want to give money to your wife so she can use up all the accumulated RSP allowance she has from years past, thus possibly reducing her tax payable to zero for the next few years?

    Spousal RSP uses your contribution room to fund a spouses RSP. You might want to look at a combination of options, to reduce both of your taxes payable to the greatest amount possible — maybe it’s time to play with some tax software, or contact a tax wiz!

    I suggest contributing fully to your RSP to get the tax break, and maxing your wife’s by putting as much as yo can into it, and claiming enough each year to get the best tax benefit for her.

    DAvid

  45. 49. Metta

    Hi,
    Can someone explain dependent/spousal credit? I have heard about tax credit for dependents, but not for no income spouses. I have no idea of what it is but it might apply to me. I’m a stay home mom with no income except the universal child care benefit and interests earned from our savings. My husband makes about 85K annually. He contributes to spousal RRSP. He’s a lawyer so he will be much higher income than I. Thanks so much.

  46. Metta, the spousal credit is for situations just like yours. I’ve written an article about it here:
    http://www.milliondollarjourney.com/spousal-amount-uccb-and-cctb.htm

  47. 51. cannon_fodder

    Lostman/DAvid,

    I almost never disagree with DAvid, but I will this time.

    Because you have a pension and your wife does not, I suggest that your wife does not contribute to an RRSP but rather a TFSA. In fact, you could give her the money to put into a TFSA.

    If you are going to put any money into an RRSP it should be a spousal RRSP in order to balance out your retirement incomes somewhat.

    I wouldn’t be able to suggest whether you should first put $ into a spousal RRSP first and then into a TFSA because I don’t have enough information. However, if forced to, my recommendation would be maximum contributions to TFSA’s for both of you first, and then if you have any money left over, contribute to a spousal RRSP.

    This will give you signficant non-taxable income in retirement and, according to the experts, RRSP’s are only preferred for those in higher income tax brackets that also reinvest the tax refunds from the RRSP’s (which could be applicable to you, but not your wife due to her $25k income).

    Perhaps this calculator might help (it’s not ideal since it doesn’t allow you to put in info for both you and your spouse so you will likely have to run the scenarios for both you and your wife separately and combine the results) -
    http://www.taxtips.ca/calculators/tfsavsrrspcalculator.htm

  48. 52. RC

    I’ve read through all the scenarios and had a quesion.
    I am interested in using a spousal RRSP to save money for a house. If I contribute to my spouses RRSP; then I can still reduce my tax rate; but my spouse’s contribution room stays the same.
    The source from Desjard’s bank shows that you don’t have to wait the 3yrs to withdraw for the HBP. Is there some other source that can show this is true?
    If I buy RRSPs for myself; and give my spouse money to buy his own; then it will take much longer to get the full amount under HBP (his contribution room is much less; and so is his income)
    Would it be better to max out on his contribution room and then use my room for his rrsp?
    Appreciate the help!

  49. 53. DK

    RC,

    You do not have to wait 3 years to withdraw from spousal RRSP under HBP. If you are the higher earner and have more contribution room, your spouse should open a spousal RRSP – he will be the annuitant, you will be the contributor.

    Your strategy should be for you to contribute to your spouse’s spousal RRSP AND your individual RRSP until both are at $25,000 (the maximum allowed to be withdrawn under the HBP) which will give you $50,000 of down-payment money, while ensuring you get the maximum possible tax deduction.

    I am currently employing a similar strategy.

  50. 54. dm

    My wife and I have an amicable separation involving young children. I turn 65 next year and am wondering if I can purchase a spousal RRSP even though we are living separately. She is not working and could cash it in in 3 years as part of child support, while I could benifit from the tax break as I intend to continue working.

    As well, if this is possible, am I correct in assuming that she must have RRSP room for me to do this?

  51. dm, i’m not sure about the separation issue and taxes, but the contribution room is based on you, not your spouse.

  52. 56. ankur

    hi,
    i have to make a contribution to RRSP say approx 6000 and for my wife approx 1500, will it be beneficial to have spousal rrsp or shall we contribute individually, my income is 46K and my wife’s income is 10K, please advice

  53. 57. Traciatim

    Ankur, though every situation is different and I’m not sure what you are using the RRSP for in the future (IE, buying a house etc), but it probably makes sense for both of your contributions come from your income in this case, as more tax would be reduced.

    You have to keep in mind the attribution rules if you are planning on using this money in the near future.

  54. 58. buyer1time

    My situation is somewhat similar related to what DK/RC had mentioned. I have already put in 25K into RRSP to take advantage of HBP. I opened a spousal RRSP and put in the 7K which maxes out my contribution room. My spouse opened a RRSP and put in her max amount which was only 1K.

    My question is since my Spouse and I could only put in 8K into spousal/her RRSP how can I somehow benefit by putting in additional amount into my spousal RRSP to make it 25K so that we could benefit taking out a totak of 25K + 25K for HPB

    Note : We were planning to buy a house at towards the end of the year.

  55. 59. Dk

    buyertime,

    If I were in your situation I would figure out what my 2009 contribution room will be (I believe QuickTax will do this for you) and contribute that amount now into the spousal.

  56. 60. Dk

    And then of course I would file a T1213 with CRA along with proof of the 2009 contribution so that I get the benefit of the contribution sooner, and invest THAT in my TFSA since I’ve already maxed out my RRSP for 2009. See here for the CRA form:

    http://www.cra-arc.gc.ca/E/pbg/tf/t1213/README.html

  57. 61. Moe

    FT, being married definitely helps in the finances department, as is proven by the Economist. http://www.economist.com/daily/chartgallery/displayStory.cfm?story_id=13636078

  58. 62. Rais

    Hi,

    My most recent Notice Of Assessment shows my RRSP limit as $20,000 and my wife’s Notice Of Assessment shows her RRSP limit as $1,500.
    Is it possible that I pay $21,500 ($20,000 for myself and $1500 for spousal RRSP) and get a tax deduction on $21,500?

    All the discussions above say that if I pay for my wife’s RRSP, my contribution room will get reduced. Does it mean, that I can pay a maximum of $20,000 irrespective of whether its going towards my RRSP or my wife’s RRSP?

    Thanks

  59. Rais, a spousal RRSP is totally separate than your wife’s personal RRSP. My understanding is that when you contribute to a spousal RRSP, it will reduce “your” RRSP contribution limit, but you get the tax deduction.

  60. 64. Sharon Monahan

    Hi,
    My husband will soon receive a large severance package of which a portion is eligible for direct transfer to rrsp’s and the remainder can be transferred also as he has enough rrsp room. As I am in a much lower tax bracket we would like to transfer an amount to a spousal rrsp.(with the hope that we could withdraw after two years and pay less taxes). Is this possible?
    Thank you. Sharon

  61. Sharon, providing that your family can open a spousal RRSP and have the RRSP room, I don’t see why you can’t deposit some of the severance money into a spousal RRSP.

  62. 66. DK

    Sharon,

    You should have your husband confirm with his former employer that the funds can be transferred to an RRSP in your name (i.e. you are the annuitant) before you go to the trouble of opening a spousal RRSP. Other than that there should be no problem with your plan.

  63. 67. Brian L

    I was thinking of closing my Spousal RRSP and using the money for an Investment Property instead. I contributed to it fully over the last several yrs, while my wife was a stay at home Mom (no income). Do I recieve that full amount initially, but than simply report it as income on mine and my wifes 2009 tax returns? Is this how the tax man is paid when closing RRSP’s?

  64. Brian, withdrawals can be made from the spousal RRSP 2 calender years after the deposit and it can be taxed in your wife’s hands. Maybe best to do the timing to optimize taxation.

  65. 69. Anthony

    Here’s a twist and not officially a Spousal RRSP but:

    I did not work in the tax year. My wife will be in the 40% bracket.

    I take out $5000 and pay my $500 (10%). She then takes the $4500 and puts it into hers thus getting the $1800 (40%) tax credit.

    I see this as ‘making’ $1300. Is it that easy or am I missing something?

  66. 70. nobleea

    Anthony;

    If you didn’t work at all, you’d be getting back the $500 that was withheld from your withdrawal. So you’d be ‘making’ $1800′. The downside is in the event of a divorce, that is no longer your money. Plus you want the RRSP values to be matched at retirement, if hers is significantly larger than yours, it’s not optimized for tax, since her withdrawals from teh rrif will be in a higher tax bracket.

  67. 71. mohan

    If spouse is not working …(never worked), Is it good to have spousal RRSP?

  68. 72. MarkS

    Well, here’s a minor variation on Anthony’s idea.

    I am in the 40% bracket, my wife earns 0. She has a regular RRSP. She withdraw $10,000 from her RRSP. We open a spousal in her name. I contribute $10,000 to the spousal.

    Net result: She still has the exact same amount of money in her RRSPs. Revenue Canada gives us a $4000 tax credit. Nice.

    Repeat yearly until I run out of RRSP room.

  69. MarkS, when you contribute to a spousal RRSP, you need to wait 2 calendar years before your wife can withdraw, or else the withdrawal will be taxed as your income.

  70. 74. MarkS

    I think you misunderstand – I never said anything about withdrawing from a spousal. I’m simply “transferring” her money from her regular RRSP to her spousal RRSP. In the end, she still has the exact same amount of money in her RRSPs (presumably to be withdrawn at retirement) and we have a $4000 tax credit.

  71. Mark, how can you repeat this cycle more than once if your wife has $0 income? Where is she getting her RRSP contribution room?

  72. 76. MarkS

    FrugalTrader,
    Since I am contributing to a Spousal RRSP, her contribution room is not important – it is my contribution room that is the limiting factor – and since I have earned income, so I get new room every year.

  73. Ok, so back to your original strategy, does it still work?


    I am in the 40% bracket, my wife earns 0. She has a regular RRSP. She withdraw $10,000 from her RRSP. We open a spousal in her name. I contribute $10,000 to the spousal.

    Net result: She still has the exact same amount of money in her RRSPs. Revenue Canada gives us a $4000 tax credit. Nice.

    Repeat yearly until I run out of RRSP room.

    Your wife has $10k in her RRSP, withdraws it, pays no tax because of low income, then gifts the money to you to deposit into a spousal RRSP which will give you a tax deduction. That is sound.

    Where I am confused is when you say repeat yearly. Do you simply mean that you will simply continue contributing to the spousal RRSP?

  74. 78. DAvid

    Mark said: “I am in the 40% bracket, my wife earns 0. She has a regular RRSP. She withdraw $10,000 from her RRSP. We open a spousal in her name. I contribute $10,000 to the spousal. ”

    “Net result: She still has the exact same amount of money in her RRSPs. Revenue Canada gives us a $4000 tax credit. Nice.”

    Of course your wife will then have $10,000 taxable income to claim, and you will lose any dependent deductions you had due to her lack of income. You might not see the whole $4000

    DAvid

  75. 79. MarkS

    No, not exactly. Let me fill in some details.

    My wife and I both worked for 7 or 8 years before we decided to have kids. My wife had a good income and invested well, now she has probably socked away say $70,000 – $80,000 in her (regular) RRSP. We now have a couple of kids, and my wife has decided to take 5 or 6 years off work and for most of those years her income will be 0 (or close to 0)

    I also contributed to my RRSPs, but I currently have around $10,000 in room.

    So….

    Every year for the next few years, my wife withdraws from her regular RRSP an amount that is equal to my RRSP Contribution Room. I then contribute that amount to her spousal RRSP. That is the meaning of my statement “Repeat yearly until I run out of RRSP room.”

    In short, every year, we are essentially just “transferring” an amount equal to my contribution room from my wife’s regular RRSP to her spousal RRSP. It costs us nothing to do this, it does not reduce the amount she has saved for retirement, and the government gives us 43.5% of this “transfer” back in cash. (Which we can invest in a TFSA or whatever.)

    There are probably a lot of people in a similar situation (who have a spouse who works but may want to take a few years off to raise kids) that can use this strategy. I can’t think of any reason not to do this.

  76. MarkS, ah yes, it’s much more clear now. You should also note what DAvid mentioned. With your wife’s new RRSP income due to withdrawal, you will lose the spousal amount (tax credit).

  77. 81. MarkS

    Agreed – I don’t see the full $4000 because my spousal amount is reduced, but it’s still a good chunk of change….

  78. 82. alzo

    Ho did you deal with the withholding tax that gets charged when you withdraw from your RRSPs?

  79. MarkS, depending on the province that you live in, you’ll be missing out on about a $2k tax benefit ($10k wife income in Ontario). Your $4k refund is now $2k, although still substantial.

    alzo, since Mark’s wife won’t have any tax owning for the year even after the withdrawal, she’ll get the withholding tax refunded when she files.

  80. 84. alzo

    ok makes more sense now. It’s still a whopping 25% withholding tax that the govt takes once you pull it out so based on a 10k withdrawal as an example that’s $2500 in withholding taxes.

  81. 85. MarkS

    Yes. To be exact, for me in Ontario, it’s 43.41% vs. 20.05% = net of $2336 of “free money” per year – not bad for a little simple paperwork…

  82. 86. Charles

    I have a question about RRSP Contributions – not sure this post is the best place to ask it, but here I go anyway:

    My wife is currently on Mat leave and is topped up by her employer to 90%. This top up will expire in March of 2010. Instead of going back to work as scheduled in March, she has asked for an additional 6 months of leave without pay (you can do that with the Govt), and plans to go back to work in September 2010. She currently only has around 6K of RRSP savings and has tons of unused RRSP room left. My first question is the following:

    1) can she make a large contribution before the deadline and then withdraw that money during her 6 months without income? I understand this is probably not the best move considering she will have half of year’s worth of income in 2010, however I’d like to know if it is possible to do that. What are the miminum timelines for withdrawl?

    My wife plans to go back to work in Sept 2010 pregnant with our second kid, take another full year of maternity (with 90% top up) which would end around the January 2012 time frame and then follow it up with up to 5 years off of work to raise the children. The question now becomes:

    1) how can I maximize RRSP contributions starting now so that I can withdrawl the money when she is home for 5 years.

    I make around 100K (and so does she actually), and we will both have excellent pensions when we retire (which is in about 30 years and).

    Any advice would be helpful and appreciated. Thanks

  83. 87. Ed Rempel

    Hi MarkS,

    Your strategy works, with a couple of qualifiers. The main disadvantage is that you are using up your RRSP room without adding new investments.

    If you had more room, the strategy would work with larger amounts,as well. The tax credit for claiming your spouse is essentially 21%, which is the same as the lowest tax bracket that goes up to about $41,000/year. So, if your income was $40,000 above the bottom of the 40% tax bracket and you had $40,000 room, you could do that same strategy with $40,000/year with the same 20% benefit.

    Ed

  84. 88. Ed Rempel

    Hi Charles,

    Yes, she can contribute and immediately withdraw. That would provide a tax deduction for 2009 and income for 2010.

    A full answer to this question would require knowing her estimated taxable income for each year and how much RRSP room she has (probably not much if she has a good pension).

    However, the biggest tax deduction comes from using the 42% bracket that starts at about $76,000 income/year. So, if she makes $100,000, then the biggest benefit is from contributing $24,000 on which she would get a refund of 42%.

    When you withdraw, make sure her taxable income for that year remains under $41,000. Her tax bracket is essentially the same (21%) from $0 to $41,000/year income when you include you claiming the spouse deduction.

    If she contributes $24,000 at the 42% bracket and then withdraws in a future year at 21%, then she gains about $5,000.

    You are losing her RRSP room, but it sounds like you don’t intend to accumulate much in RRSPs because of your 2 pensions – is that right, Charles?

    Ed

  85. 89. Charles

    Ed,

    Thanks for taking the time to reply.

    We will both have federal govt pensions when we retire (equal to 70% of the best 5 years of work). I’m pretty sure the amount we will receive will put each of us in the highest tax bracket at retirement, and thus why I never really intended to accumulate much in RRSPs. Deferring the tax today, to pay it again later. There are other strategies to avoid taxes (life insurance, tfsa).

    It looks like I will maximize RRSP contributions for my wife before tomorrow’s deadline and do that same next year while she’s still in the 42% tax bracket. Then I will pull it out while she’s off while and she’s in the lowest tax bracket.

    One follow up question- I also have about 30K worth of RRSP room. If I contribute to my RRSP, can she also pull from it during those 5 years off of work? Or do I have to open a seperate “Spousal RSP” ? I understand that for Spousal RRSPs, there’s a 3 year wait time prior to withdrawl to avoid being taxed at my tax bracket.

    Thanks again.

    Charles

  86. 90. MarkS

    Hi Ed,

    Well, you’re not completely correct in saying that you would see the same 20% benfit if you transferred $40,000 per year.

    if you had room, you COULD transfer $40,000 all at once, but you likely would not see the same benefit. The downside is not on the on tax bracket of the low-income spouse, it’s on the side of the CONTRIBUTING spouse.

    Say for example, I make $100,000 in Ontario. If I contribute $10,000 I will net 43.41% – 20.05 = 23.36% on my whole transfer.
    If I transferred $40,000, my income would go down to $60,000 and I would only be making 31.15 – 20.05 = 11.05% on my last dollar.

    So, if the low income spouse is going to have 0 income for a few years, it would generally not be advisable to to one large transfer even if you did have the room.

  87. 91. Ed Rempel

    Hi Charles,

    You may be right about not using RRSPs in your case, although it is usually better to actually work out your retirement income, not just assume. TFSAs generally are about equal to or slightly better than RRSPs if you will retire in the same tax bracket as when you contribute.

    Insurance is not really comparable, since it requires that you actually have a need for insurance for life – which few people do. It usually also comes with high fees and limited investment choices.

    The SM may actually be a good strategy for you. For people with large pensions, they usually get little RRSP room and may be in higher tax brackets after they retire.

    If you retire with only pensions and RRSPs, then every dollar is fully taxed. If you need to buy a car or have a larger expense, how do you get money without paying full tax?

    If you do the SM or use TFSAs, then you can have a portfolio with low tax after your retire. This is a great complement to a large pension.

    For our retired clients that have both significant RRSP/pension plus significant non-RRSP/SM portfolios (nobody has a large TFSA yet), then we can plan their retirement income very effectively by determining how much to take out of which pot.

    Yes, you need a separate spousal RRSP. It must be a separate RRSP from your wife’s own RRSP and show you as the contributor.

    Ed

  88. 92. Ed Rempel

    Hi MarkS,

    Good point. Up to $40K works for the receiving spouse, but that could push the contributing spouse into the low tax bracket.

    Ed

  89. 94. Ash

    Hello,

    I have a question about RRSP withdrawal. We have multiple Spousal RRSP accounts (GIC and brokerage). My last contribution to the Spousal RRSP GIC was more than 3 years back. However, I have been contributing yearly to the Spousal RRSP account at the brokerage.

    If we withdrew the money from the GIC Spousal RRSP, will the income be taxes at my wife’s marginal tax rate?

    Thanks

  90. 95. Reena Sundar

    I have a comment in regards to RRSPs in general. Although I think they are beneficial I do think there are smarter options when looking to diversify one’s portfolio. I transfered some money out of RRSP’s a few years back because I keep losing every year and with inflation its a joke to think we are making any money. I transferred most of my RRSPs into a MIC (Mortgage Investment Corporation) with an Alberta based development company named Everest group. This MIC offers a 10% annual fixed rate and is backed by real hard assets- land. Not like our RRSPs that our distributed amongst so many stocks unknown to us. I would rather be close to my money and know where its going first hand. I would advise you all to look into this at least. My 50K has turned into 66.5K in 3 years. Best discovery I ever made! Happy investing.

  91. 96. Zissou

    My income is around $93K and my wifes is around $68K…about $25K difference. I have a govt pension and she has a DC pension…we’re in our early 30s. Does it make sense for me to set-up and contribute to a spousal RRSP to get a better tax break?

    At retirement were anticiapting that I’ll have more retirement income so I’m assuming that a spousal RRSP would be best for us for the next little while to reduce my current taxes…and to shovel the tax refund into extra mortgage payments. this may change if our situation changes but I’m leaning towards this strategy now. Thoughts or advice?

  92. 97. Monika

    there is nothing close to my scenario in the questions above. My husband is 15 years older than me, and currently drawing a small pension, no CPP or AOS- still too young. I am working, and have a pension plan. He has about double in his RRSPs, than I do. Is there any benefit to making spousal RRSP contributions?

  93. 98. Simon

    So much to read that it is Confusing.
    ME age 41: 90K income ; Company Pension. 6K(current value) stock portfolio.
    WIFE (common law) age 43: Stay at home mom – no income, no pension.
    Both: Significant RRSP contribution room. (neither have ever contributed to one); Mortgage co-holders; Wanting to buy a bigger property and don’t qualify for HBP.
    Question: A)Best strategy to reduce my taxable income? B) Should I borrow from the bank to contibute before the May 1st deadline? C) Purchasing new property strategy?

    Im lost in all this and some savvy advice (anything and everything) would be muchly appreciated. Thanks in advance!

  94. 99. Ed Rempel

    Hi Simon,

    You have not given us the numbers involved. How much more expensive will your new home be, how much equity do you have in your home and when would you like to move? Without know about your mortgage and cash flow, it is hard to answer your new home question.

    The 42% tax bracket applies to income above $76,000 for 2010. It may make sense to contribute $13,000 to a spousal RRSP in your wife’s name. You should get a refund of 42%, or $5-6,000 more than you would normally get.

    It is probably a good idea to do an RRSP loan now so that you can make a contribution for last year.

    Contributing enough to get your taxable income down to the bottom of the 42% tax bracket, or about $13,000, each year is probably a good idea, if you can.

    You could do a 1-year loan each year and pay it off, which allows you to use the tax refunds for whatever you want – such as for an RESP contribution for your kids. Or you could do a 2-year loan each year and pay off the prior one with your refund each year.

    Without knowing your entire situation, your available cash and your retirement and other financial goals, it is hard to say whether the above advice is really the best.

    Ed

  95. 100. Y S

    my income is 90000. I allready have 32000 in my RRSP since last 4 years. I have $41000 rrsp room shown on my 2009 notice of assessment. My spouse don’t work, don’t any RRSP account and only have 1000 room on her 2009 assessment.
    We are planning to buy our first home anytime this year.
    What are our options regarding RRSPs.

    We talked CIBC rep today regarding this, but he said I can only contribute earnings on my RRSP towards her RRSP plus only her room for RRSP.
    I am getting confused, please explain my option. Thanks

  96. 101. FrugalTrader

    @Y, what you can do is open a spousal RRSP for your wife. What you contribute to that spousal RRSP will result in a tax deduction for you. Note that a spousal RRSP is different than an individual RRSP for your wife.

  97. 102. Y S

    That what I understand from this blog, but CIBC rep know nothing about spousal RRSP even after after consulting with 2 other reps. This time I will just ask to open spousal RRSP without any futher information!

    Another question: I want to deposit 25000 in spousal RRSP for HBP (I allready have more then 25000 in my own RRSP). So should I open account for 2010 or 2011 tax year, my income in 2010 is $76000 and will be $90000+ in 2011.
    And suppose if I open spousal RRSP in March for 2011 and withdraw just after 3months like in June to buy first home, do I still be eligible for tax benefit for 2011?

  98. 103. FrugalTrader

    @Y, please refer to the comments of the home buyers plan (HBP) thread. I believe you can withdraw from a spousal RRSP 90 days after your contribution. But you should really verify this with an accountant.

  99. 104. al

    hi,
    how do i get back the money that was held back when i withdrew all the money in the spousal rrsp last dec/2010 ( initially deposited the money in dec/2007) .
    do i have to apply for ir ..any form i need to use.
    my wife has no income and the total withdrawal was 25,773.75
    the bank deducted 7,732.12.

  100. 105. LegalWins82

    Reena, is it legal to advertise products that you are selling?
    The FBI has rules against that. No such rules in Canada?

  101. 106. FrugalTrader

    Thanks for catching that Legal, I modified her comment.

  102. 107. bobby

    Hi MarkS,
    If i contribute in spousal RRSP on May 15 2011 what is the earliest date i can withdraw so it will be taxed under my spouse ?

    Thanks,
    bobby

  103. 108. Ed Rempel

    Hi Bobby,

    January 1, 2014, assuming you don’t make any more contributions to any spousal RRSP until after that. Withdrawals are taxed to the spouse if you have not made any contributions to any spousal RRSP in the year of withdrawal or the 2 previous calendar years.

    Ed

  104. 109. bobby

    Hi Ed,
    So you mean if i can contribute from now until Dec 31 2011 and than do not make any contribution in spousal RRSP till Jan 1 2015 than only i can able to withdraw any date in 2014 which will be taxed to my spouse.

    Please correct if i am wrong.

  105. 110. Ed Rempel

    Hi Bobby,

    Yes, you got it. That is correct. The only question is whether this is a good strategy.

    You might be thinking it is obvious to withdraw at a lower tax bracket, but you do lose the future tax-free compounding that you would get if you leave it in an RRSP. If you recontribute it, you are using up your RRSP contribution room.

    If this is one year that your wife will have no taxable income and you have tons of RRSP room that you will never use, then it clearly works for you.

    Just remember that the main benefit of RRSPs is the tax-free compounding over the years, so you usually should not do transactions ONLY for tax reasons (such as withdrawing from an RRSP just because your wife is in a slightly lower tax bracket than you.)

    Ed

  106. 111. bobby

    Hi Ed,
    My wife is not working since 2008. Only income she has is UCTB(Universal child tax benefit) and HBP(Home buyer plan) withdrawal which
    we are not putting back in RRSP.

    For Example,
    I)If i contribute in spousal RRSP in 2011(Amount = 10K) and i withdraw(Amount = 10K) in 2014 than it will be taxed under my spousal income for
    2014.If my income is 75K and she don’t have any income other than mentioned above(UCTB+HBP) how much money i can save(For Tax Year 2011) and how much
    tax she has to pay in 2014 ?

    II)if she don’t withdraw Amount = 10K in 2014 than how much tax she has to pay(after applying individual tax credit and all other calculations) ?

    Thanks a lot for your time and help in advance.

    Bobby

  107. 112. Ed Rempel

    Hi Bobby,

    Your wife can earn $10,000 with essentially zero tax (and probably a bit more), but it still costs you money. You can claim a tax credit to claim her as en eligible dependent. The more she makes, the smaller your tax credit.

    The rate on the tax credit is the same as the lowest tax bracket – about 21%. So, for all practical purposes, she is in a 21% marginal tax bracket, not a 0% tax bracket.

    RRSP contributions when you are in the 21% bracket are obviously much less beneficial than for people in higher brackets, and depending on your retirement income, may have no benefit at all. TFSAs are better for people in lower tax brackets.

    When your wife works, what tax bracket is she in? If she earns less than $44,000/year, then she is always just in the 21% bracket, so she is in the same tax bracket.

    If you withdraw from your RRSP, what will you do with the money? If you spend it, then you will obviously be worse off in the future then if you kept it invested. If the purpose here is effective planning, not that you need the money, then I would suggest to only withdraw it if you would invest it somewhere else, such as in your RRSP, or a TFSA.

    Ed

  108. 113. bobby

    Hi Ed,
    If I invest 10K in spousal RRSP on May 13 2011 and on Jan 1 2014 if SHE withdraw 11k(amount after appreciation) than she has to pay
    21% tax on 11k and i saved 33% tax on 10k for Year 2011.

    1)33%-21% = 12% tax saving for me(i am in higher tax bracket)
    The reason for doing this transaction is to save 12% tax. Again on Jan 1 2015 i will invest 10K in spousal RRSP and withdraw in
    Year 2018. What do you think ?

    Keep in mind that she is not working and she will not work for 10 more years.

    2)I couldn’t get your point of tax-free compounding over the years. Because whatever appreciation we get on initial investment
    we always have to pay tax.

    Please correct me if i am wrong in any of the above 2 statements and clarify it separately what is the best thing to do and how ?

  109. 114. Steve

    I don’t get it. If someone makes $0 one year and withdraws about $10,000 from their spousal rrsp (assume no contributions in last 2 years). Shouldn’t the tax implication be ~0 since we don’t get taxed on roughly the first $10000 in income?

  110. 115. Ed Rempel

    Hi Bobby,

    Your strategy works, but the downside is that you are using up your RRSP contribution room. You may be doing this for a small tax gain, instead of focusing on very large, long term investment gains.

    You are doing all this to save about 10% in tax over 3 years. However, if you left the money in the spousal RRSP and invested it well, you could average 10%/year return on your investments (average stock market returns).

    At that rate, your investments would double about every 7 years, so in 20 years you would have 8 times your original investment. That is significant money – and far more than the 10% tax savings from your strategy.

    This may or may not apply in your case. It sounds like RRSPs are probably worthwhile for you. We find it is far more effective to focus on the big long term gains, rather than the small short term gains.

    Your assumptions are basically correct, except that it is you that would pay the 21%. You get a tax credit of about $10,000 for claiming your wife as a dependent, which would save you about $2,000/year of tax.

    Ed

  111. 116. Ed Rempel

    Hi Steve,

    If you are single, they you are correct. But if you are married, your spouse can claim a tax credit of about $10,000, which would save her a bit over $2,000 of tax.

    The tax credit is reduced for every dollar of taxable income you have, so if you withdraw $10,000 from your RRSP, then your spouse would not get this tax credit.

    Ed

  112. 117. Steve

    Hi Ed,

    I’m still a little fuzzy on this. Don’t we all pay tax according to the tax bracket we fall under regardless of marital status? Hence if my wife made no money and withdrew ~10000 from her spousal rrsp (I made no contributions in previous 2 years). Shouldn’t her tax payable be almost 0 since we all pay 0 tax on roughly the first $10000 of income?

  113. 118. Ed Rempel

    Hi Steve,

    Yes, your wife would not pay any tax, but it would probably affect your tax return. Do you claim the spouse tax credit of up to $10,382 for your wife on your return? That tax credit on your return would be affected if she has taxable income.

    Ed

  114. 119. Steve

    Ed,

    Thanks for your reply. The light just turned on in my head now and I see what you are saying! I lose the tax credit I would have had had she not made any taxable income.

  115. 120. bobby

    Hi Ed,
    Please correct me if i am wrong.

    If i invest in spousal RRSP at the end of December 2011 and withdraw in first week of January 2014 than it is only 2 years of
    investment and saving approximately $1400 in tax even if i loose tax credit of about $10,000 for claiming my wife as a dependent.

    I don’t mind using RRSP contribution room.

    Thanks,
    bobby

  116. 121. Alan

    My common law spouse has unused RRSP contribution room of approximately $125,000.

    I am expecting a large sum of money and my unused RRSP contribution room is limited.

    Can I contribute to her RRSP and take the deduction against the income reported on my tax return?

  117. 122. LJ

    I am a stay at home mom, but also an occasional teacher. My income varies from a few thousand to $15,000 a year. My husband is making slightly over $90,000 a year. Does it make more sense for him to contribute to his own RRSP or open a spousal RRSP for me? Also, we used my RRSP to help with our first house downpayment, seven years ago. Should he help me pay it off, or should I just pay back the minimum each year?

  118. 123. KITZ

    HELLO FOLKS
    looking for some suggestions plz, my wife is stayhome mom last 4 yrs,i made around 80k in 2011, i have plnty room for rrsp contribution limit.I also have a company pension plan.
    wud it make more sense putting money in my rrsp or shud i have her start her own rrsp.
    ANY SUGGESTIONS ARE WELCOME
    THNKS

  119. 124. Boo12345

    Husband 130k, 13k allowance which is normally maxes each year
    Wife 55k, 34k tax allowance not used.
    Child care 14k

    What is the best option? Without spousal RRSP we are getting back $6200 each year so far.

  120. 125. yaric

    Spouse RRSP is great tool. But can someone explained me how to repeat it?

    I placed 20K to SRRSP in 2009, fully withdrawn 2012.
    Now question, when I eligible to deposit money into new Spouse RRSP?

    - Anytime from now
    - After Jan 1 2013
    - After March 1 2013 (as 2013 RRSP deposit)

    I am not able to find answer anywhere.

    Thanks.

  121. 126. mojo

    @Yaric — I think the answer is after jan 1 2013. According to attribution rules, if the withdrawl is made from a spousal rrsp within three years of “LAST” contribution, it will be attributed back to contributing spouse. Now if your spouse withdrew in 2012 and you make a contribution in 2012, the last year of contribution from CRA view becomes 2012 and you will get dinged with paying taxes on the withdrawl.. HTH.

  122. 127. TJ

    Can you contribute to your Spouse without contributing to your own RRSP ?

    Eg :

    Spouse 1 : makes $ 60,000 , will make the same amt in future yrs too.

    Spouse 2 : makes $ 0 , is stay at home & has Zero income..will also not have income in future years & is ALMOST guaranteed to withdraw this Spousal RRSP made on his behalf after the 2 CALENDAR yrs.

    RRSP Deduction limit for Spouse 1 is $ 8,000 .

    Can Spouse 1 do a spousal RRSP for $ 8,000 without contributing anything to his/her own RRSP ?

    Will they allow that ?

    Because Spouse 2 is going to withdraw it after 2 Calendar yrs & will also have Zero income then ..but Spouse 1 is still going to make $ 60,000 – 2 years from now

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