It's looking like this is the year we max out his RSP & TFSA, and her TFSA, and the debate is on what to do with the overflow, either continue to max out her RSP or start a taxable account in her name.
Him:
Full time stable work, in a high income salary (38.29% marginal tax rate, BC)
RSP will be maxed this year through matched employer plan, have been contributing to a spousal RSP as well. Trying to balance total value at FIRE@55 of his RSP with her RSP + spousal
For the past three years, was able to drop his taxable income down three brackets to the 28.2% marginal tax rate through massive RSP contributions, but this year only have RSP room to drop down two brackets to the 31 % marginal.
TFSA will be maxed in April this year.
No taxable investments, other than a small H.I.S. account which makes less than $10/month interest income. Building this $200/month only to get the bonus interest rate offered by the big bank. Should we have set this up in her name?
Her:
Part-time, 2-3 days a week, currently in lower half of lowest income bracket (20.06% marginal tax rate, BC)
Starting a new job working from home (tax write offs of home expenses??!!), 2 days a week, but will likely stay in the top of the lowest income bracket, even with both jobs.
$80,000 open RSP contribution room
TFSA will be maxed in May this year.
No taxable investments (yet)
No debt, other than monthly credit cards paid off in full; mortgage is paid off.
Plan for FIRE@50-55 (in 5-10 years) is to each be in the lowest 20.06% tax bracket through RSP withdrawals. No pensions, other than CPP/OAS. I'm really liking the -9.6% negative tax rate on eligible dividends, but don't know if that is a better benefit than her RSP tax delayed growth.
It is possible that due to growth rate of the Spousal RSP (holding VTI and also delayed first income due to 3 year attribution rule), that her old age income greatly exceeds his.
so.....
1. Should she open a taxable investment account holding VCN (or other TSX div ETF?) or start to max out her RSP? If taxable, and she invests all her income to taxable via her new checking account (her paper trail), then see 2. Can she legally put 100% of her income to this taxable account, without taxes being attributed to him?
2. Can he legally contribute more into her RSP than her current annual income? Currently, checking account has always been a joint account, with household finances being fully integrated (his/hers = theirs). He is already filling up her TFSA.
I hope I've provided enough, but not too much (online security) to be helpful.
@Lews Therin @Stasher @Retire-Canada @RichMoose , hope to get your thoughts!