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Your Spouse Isn’t Working? An RRSP Tax Opportunity You Could Be Missing
By Martin Cloutier, CFP®, CIM® – September 9, 2026
If one spouse has little or no taxable income, there may be an opportunity to withdraw money from an RRSP at a relatively low tax rate.
For couples approaching retirement, this can be an important planning window — and one that may disappear once CPP, OAS, pension income, and RRIF withdrawals begin.
Why Leaving an RRSP Untouched Isn’t Always Best
Many Canadians assume that keeping money inside an RRSP for as long as possible is automatically the most tax-efficient strategy.
Sometimes it is. But not always.
If one spouse has retired, stopped working, or simply has very little taxable income, they may have access to lower tax brackets today.
Withdrawing some RRSP funds during those lower-income years could potentially mean paying tax at a lower rate than waiting until later in retirement.
The important point is that unused low tax brackets do not carry forward. If you do not use that opportunity this year, you cannot save it for later.
What Happens Later in Retirement?
As retirement progresses, taxable income can increase.
A spouse may eventually receive:
- CPP
- OAS
- Pension income
- Mandatory RRIF withdrawals
At that point, RRSP or RRIF withdrawals may be taxed at a higher marginal rate.
There is also the longer-term issue of one spouse passing away before the other. Registered assets may transfer to the surviving spouse, which can result in more income being concentrated on one tax return.
That can significantly change the household’s tax situation.
Could Early RRSP Withdrawals Make Sense?
The answer depends on the overall financial plan.
For some couples, it may make sense to withdraw a portion of an RRSP during lower-income years and then use the after-tax proceeds for other purposes.
For example, the money could potentially be:
- Contributed to a TFSA if contribution room is available
- Invested in a non-registered account
- Used for planned retirement spending
The objective is not to withdraw money simply for the sake of withdrawing it.
The better question is:
Could paying some tax today help reduce a larger tax bill later?
Look at the Lifetime Tax Bill
Retirement tax planning should not focus only on minimizing this year’s tax bill.
A strategy that creates a small amount of tax today could potentially help:
- Reduce future RRIF balances
- Lower future mandatory withdrawals
- Reduce the risk of OAS clawback
- Move future investment growth into a TFSA
- Reduce the amount of registered assets ultimately taxable later
That is why it is important to model different scenarios before making a decision.
The goal is not to pay zero tax. It is to pay tax intelligently, preserve flexibility, and make decisions based on your entire retirement plan — not just one calendar year.
At Prestige Private Wealth Management, we help clients understand how their RRSPs, RRIFs, TFSAs, retirement income, taxes, and estate planning work together.
Watch the full video to learn more!
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Disclaimers: Any view or opinion expressed in this article are solely those of the Representative and do not necessarily represent those of Harbourfront Wealth Management Inc. The information contained herein was obtained from sources believed to be reliable, however accuracy is not guaranteed. The information transmitted is intended to provide general guidance on matters of interest for the personal use of the viewer, who accepts full responsibility for its use, and is not to be considered a definitive analysis of the law or factual situations of any individual or entity. Any asset classes featured in this presentation are for illustration purposes only and should not be viewed as a solicitation to buy or sell. Past performance does not necessarily predict future performance, and each asset class has its own risks. As such, this content should not be used as a substitute for consultation with a professional tax or legal expert, or professional advisors. Prior to making any decision or taking any action, you should consult with a licensed professional advisor.
Harbourfront Wealth Management Inc is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization .
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