There are saving and tax strategies you and your spouse may be able to use to your advantage when planning for or already living in retirement.
"By focusing on your long term priorities, you and your spouse can determine when and how well you retire," says Lee Anne Davies, head, Retirement Strategies, RBC. "While planning together can be challenging, it's fundamental to keeping a long term plan on track. A professional financial advisor can help build a plan that includes your shared and individual goals."
Working together you can achieve some great savings and build momentum for a successful retirement:
Spousal RRSPs
Directing some or all of your RRSP contribution to a spousal plan lets you still get the tax deduction but attempts to equalize the amount of income each of you will receive in retirement. The spousal plan is registered in your spouse's name. With planning, your spouse, not you, is taxed in retirement when withdrawals are made from this plan. Depending on tax brackets, the tax savings can be significant.
Tax Free Savings Accounts (TFSA)
You can give funds to your spouse to contribute to their own TFSA. The income earned on investments inside the TFSA is not taxable to you or your spouse, potentially reducing your family's overall tax bill now, and into the future.
"Your retirement could easily last 25 years or even longer," says Ms. Davies. "But financially, this can present a challenge. It's important to work with your spouse to build a financial plan, ideally before you retire.