Setting up a spousal RRSP is a good idea if you expect your spouse or common-law partner to be in a lower tax bracket than you on retirement. When funds are withdrawn from the spousal RRSP, they are taxed in your spouse’s or common-law partner’s hands at his or her lower tax rate (this arrangement is subject to special rules to prevent abuse). This reduces your family’s total tax bill. This strategy also means that benefits such as the pension credit can be made available to both of you, and you may reduce your exposure to the Old Age Security (OAS) clawback
Regardless of the pension income-splitting rules, spousal plans will still have a role to play. Since the pension income-splitting rules limit the ability to income split to 50% of the amount received, a spousal RRSP may still allow for greater income splitting since 100% of the payments from the spousal RRSP can be taxed in the hands of the spouse with the lower income. Spousal RRSPs can also be useful in situations where the funds put aside are not always intended for retirement— for example, where both parties want to access RRSP contributions to purchase a home and one spouse has not had sufficient income to benefit from making his or her own RRSP contributions.