Though optional, the rules allow spousal/common-law partner RRSP contributions to benefit from future "income splitting." If you make a spousal RRSP contribution, you claim the RRSP deduction on your tax return, even though your spouse or common-law partner is the annuitant. This means one spouse can contribute on behalf of the other who is the plan holder. Later in retirement, your spouse or common-law partner who owns the plan, reports the income for tax purposes when the funds are withdrawn (as long as certain conditions are met). If your spouse/partner has less income than you do at that time, tax may be reduced significantly. This income-splitting may place one or both of you in a lower marginal tax bracket. Thus your combined tax bill at the time of retirement may be significantly lower than the taxes paid on a single RRSP/RRIF income stream. This could reduce or avoid future clawbacks of government benefits relative to income (such as Old Age Security). There may be another spousal RRSP advantage. Let's say you are over 69 with remaining RRSP contribution room. Your spouse or common-law partner is 69 or younger. You can use your RRSP contribution room by contributing to a spousal RRSP. Thus you will reduce your current taxable income, while increasing your spouse's or common-law partner's future income in his or her income-withdrawing years. Essentially, when you invest in a spousal RRSP, you actually give some of your eventual retirement income to your partner, who then owns those funds. You get the tax deduction when you contribute. After more than three years from the time of contribution, the money withdrawn will be classified as your partner's income.