LLQP Segregated Funds & Annuities · Component 1.2 · 35% of the exam
Which existing plan permits contributions for a spouse to build the spouse's retirement income without attribution issues in the long run?
- AAn RESP in the spouse's name, since the subscriber can direct the accumulated growth to the spouse later
- A spousal RRSP, subject to the three-year rule, and a TFSA funded by gift
- CA TFSA only, since it is the sole plan on which attribution never applies between spouses
- DAn RDSP opened for the spouse, since government bonds and grants build retirement income
Correct answer: B) A spousal RRSP, subject to the three-year rule, and a TFSA funded by gift
Income splitting options include spousal RRSPs and gifting to a spouse's TFSA. Pension income splitting at retirement is another tool.
Why the other options are wrong
- ARESPs are for education, not retirement income splitting.
- CThe spousal RRSP is the primary tool; the TFSA complements it.
- DRDSPs are for eligible disabled beneficiaries only.
Exam tip
Splitting tools: spousal RRSP, gifted TFSA, pension income splitting.
Common mistake
Ignoring income-splitting opportunities between spouses.
What this tests
CISRO competency component 1.2 — Assess the client's needs and situation — which is weighted at 35% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 1
- The first step before recommending a segregated fund or annuity is to:
- A client's 'time horizon' for an investment is:
- 'Risk tolerance' in an investor profile refers to:
- A client says he wants 'high returns with no risk of losing money'. The agent should:
- Investment objectives are commonly classified as:
- Why is the client's marginal tax rate relevant to a segregated fund recommendation?
Practice the whole Segregated Funds & Annuities module
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