The way to consolidate your registered accounts for retirement revenue in Canada

There’s a spousal attribution rule with spousal RRSPs that applies should you take withdrawals inside three years of your partner contributing. This will likely consequence within the withdrawals being taxed again to the contributor.

Once you mix an RRSP and a spousal RRSP, whether or not you prefer it or not, the brand new account have to be a spousal RRSP. In consequence, you’ll sometimes switch an RRSP into the present spousal RRSP. 

There are not any tax variations between an RRSP and a spousal RRSP for withdrawals, aside from the aforementioned attribution guidelines. 

Even should you separate or divorce, your spousal RRSP can’t be transformed to a private RRSP. 

In consequence, Steve, your spouse may mix her RRSP and her spousal RRSP by changing them each to a spousal RRIF. I might be inclined to do that. 

Combining LIRAs with different registered accounts

Locked-in RRSPs have completely different withdrawal and consolidation guidelines than common and spousal RRSPs. The locking-in provisions of your spouse’s locked-in retirement account (LIRA) are supposed to forestall massive withdrawals. These funds would have come from a pension plan she beforehand belonged to. Pension cash is handled otherwise from private retirement financial savings, such that locked-in accounts have most withdrawals in addition to minimal withdrawals. 

In some provinces, an account holder might be able to unlock their locked-in account if the stability is beneath a sure threshold. This will likely apply to your spouse, Steve, as you talked about the account is small. Some provinces additionally permit a one-time unlocking of a portion of the account once you convert a LIRA to a life revenue fund (LIF), which is basically a RRIF equal for a LIRA. 

In consequence, Steve, your spouse might be able to get some or all of her LIRA account transferred to the identical RRIF as her RRSP and spousal RRSP. If not, she should accept having a RRIF and a LIF.