‍How timing your contributions can create extra tax deductions, earlier withdrawals, and more flexibility.

At TIER Wealth, we spend a great deal of time helping clients take advantage of opportunities that exist not because the rules are complicated, but because very few people are aware of how the rules actually work.

December is one of the most valuable months for RRSP planning because several tax rules are calendar-year based, not date-based. This creates windows where a contribution made in December is dramatically more powerful than making the exact same contribution in January.

Below are two such opportunities:

1. The classic “overfund your RRSP in December of the year you turn 71.”
2. A brand-new strategy: making a December contribution to a Spousal RRSP to end the attribution period one year earlier.

Let’s walk through both with clear examples.‍

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1. The Classic Strategy: Overfund Your RRSP in December of the Year You Turn 71

You must convert your RRSP to a RRIF by December 31 of the year you turn 71.

But the income that you earn when you are 71 still generates RRSP contribution room. That new room becomes available the following January—when you are already 72 and no longer allowed to contribute.

In other words:

You earn new RRSP room that you can never use.

What can be done?

In December of the year you turn 71, you deliberately contribute the amount of room that will be generated by your earned income during that year. This causes a temporary over-contribution, which triggers a 1% penalty for one month.

On January 1, your new RRSP room appears and the over-contribution automatically disappears.

Here is an example to show how this works:

• Earned income at age 71: $166,667
• New RRSP room that will be created: 18% = $30,000
• Contribute $30,000 in December

Penalty:

• $30,000 − the $2,000 buffer = $28,000
• 1% for December = $280

On January 1:

• RRSP room increases by $30,000
• Over-contribution instantly corrects itself
• You now have the right to claim the deduction in the upcoming tax return
• The full $30,000 is permanently tax-sheltered inside your RRIF

‍Why it’s valuable

This strategy typically produces:

• A large RRSP tax deduction
• Only one month of small penalty tax
• A permanently higher RRIF base (and therefore more long-term tax-deferred growth)
• More flexibility for income splitting in retirement

For those still earning employment income at 71, it is often a clear win.

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2. A New Strategy: The December Spousal RRSP Contribution to End Attribution One Year Earlier

Many Canadians understand the basics of Spousal RRSPs, but they might not understand that the attribution rule is based entirely on calendar years. This creates a planning opportunity that can accelerate attribution-free withdrawals by a full year—and in some cases, can be combined with a deliberate over-contribution to further enhance flexibility. This over-contribution strategy works at any age. It does not require being 71.

Understanding the Spousal RRSP Attribution Rule

The purpose of a Spousal RRSP is to allow a higher-income spouse to contribute using their contribution room, receive the tax deduction, and have the future withdrawals taxed in the lower-income spouse’s hands.

However, this income-shifting only works if the contribution stays inside the Spousal RRSP long enough. Otherwise, the Canada Revenue Agency (CRA) will attribute withdrawals back to the contributing spouse.

The critical rule is this:

Withdrawals made by the spouse within:

1. The year of contribution, plus
2. The following two calendar years

→ are attributed back to the contributor.

This clock is not 36 months. It is not date-based. It is strictly tied to calendar years.

Because of this, timing matters enormously.

Why Timing Matters

A Spousal RRSP contribution made on:

• January 1, 2026, and
• December 31, 2026

…has the same attribution window: 2026, 2027, 2028.

But:

• A contribution made on December 31, 2025 has an attribution period of 2025, 2026, 2027.
• A contribution made on January 1, 2026 has an attribution period of 2026, 2027, 2028.

One day of calendar timing changes the attribution window by an entire year.

The Strategy

If you know your spouse will want or need to withdraw funds soon—and you want those withdrawals without attribution—you can accelerate the attribution clock by:

Making next year’s planned Spousal RRSP contribution early, in December of the current year.

By pulling the contribution forward into December:

• The attribution clock starts earlier, and
• The withdrawals can become attribution-free one year earlier as well.

To show how these timelines work, let’s assume that you plan to contribute $30,000 to a Spousal RRSP.

Option A — Contribution in January 2026

Attribution applies in: 2026, 2027, 2028

Earliest attribution-free year: 2029

Option B — Contribution in December 2025

Attribution applies in: 2025, 2026, 2027

Earliest attribution-free year: 2028

Same contribution. One full year gained.

Integrating the Over-Contribution Strategy (Optional Enhancement)

Just as with the classic age-71 strategy, you can combine this timing advantage with a deliberate, controlled over-contribution.

This works because:

• You may want to contribute in December,
• but your RRSP contribution room for the following year does not exist yet,
• so the December contribution temporarily creates an over-contribution,
• which triggers a 1% penalty only for December,
• and then on January 1, your new RRSP room appears, instantly eliminating the over-contribution.

Why would you do this in a Spousal RRSP?

Because it lets you:

1. Accelerate the attribution clock, and
2. Claim the tax deduction in the new year, and
3. Start attribution-free withdrawals earlier, even if you didn’t have contribution room in December, and
4. Grow tax-deferred capital in the Spousal RRSP sooner, and
5. Create income-splitting opportunities one year earlier.

This is especially valuable when:

• One spouse is retiring earlier
• The couple expects early withdrawals
• The spouse will be in a low-income year when withdrawing
• There’s a large one-time withdrawal planned (e.g., paying off a mortgage, funding TFSAs, buying a cottage, etc.)
• You want earlier RRIF withdrawals taxed to the lower-income spouse
• The couple wants flexibility to draw sooner without attribution concerns

The tax cost of the over-contribution

• RRSP over-contributions above the $2,000 buffer trigger a 1% penalty per month.
• If done in late December, the cost is usually trivial.
• Example:

Over-contribution of $30,000 → penalty for one month = $280

Tax deduction next year on $30,000 at a 48% marginal rate = $14,400

The trade-off is positive in many situations. If Spousal RRSP planning is a part of your overall wealth strategy, this December acceleration can meaningfully enhance flexibility and reduce tax.

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Final Thoughts

Both of these strategies stem from the same underlying concept:

‍Certain RRSP rules operate on calendar years—not dates.

By understanding that nuance, you can dramatically increase flexibility, take advantage of deduction that might otherwise be missed, and reduce unwanted attribution timelines.

If you’d like help determining whether either of these strategies applies to you or your family, we’re always here to assist. At TIER Wealth, thoughtful timing and precise planning often create opportunities that others overlook.

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