Income Splitting in Retirement

There are advantages to income splitting in retirement. For example, the tax on 2 $50,000 incomes is less than the tax on one $100,000 income. If you are age 65 and over Canadians receiving "qualified pension income" will be entitled to allocate (or split) up to 50% to their spouse. This means RPP payments, RRIF payments and RRSP annuity payments qualify. In addition, spouses can share their CPP retirement pensions.

If you are under the age of 65 qualifying pension income is limited to RPP payments only. Withdrawls from RRSPs, and OAS, GIS, CPP payments do not qualify.