Combining RRSPs

Q – My wife and I will be retiring in a couple of years. Throughout our working life, my wife has contributed to a spousal RRSP in my name since she has a pension plan at work and I do not. When we retire, can I simply combine the spousal plan with my regular RRSP, that is, transfer the funds over tax free so that I have just one RRSP plan rather than two? – P.P.

A – Not immediately. There are certain rules governing withdrawals from a spousal RRSP and these remain in place for three years after the last contribution is made to the plan. After that period has elapsed, there should be no tax impediment to combining the two plans although bureaucratic rules may get in the way – financial institutions tend to go by the book, which says spousal and regular RRSPs must be separate. If you convert a spousal plan to a RRIF the rule says that you can’t make more than the minimum withdrawal for the first three years. – G.P.