[steve41]

If you are merely tracking net worth, then you will be OK lumping assets together, especially with the recent introduction of income splitting.

However, if you are intent on meaningful financial planning, you really should separate the assets. Income tax is an important part of the planning process, and until Canada adopts joint spousal tax returns, separating the two plans is wisest.

(BTW, I would love to see joint returns... it would greatly simplify tax prep and future financial planning)

 

[steve41]

It is a two step process. First of all,assume both live to some ridiculous ripe old age. Create a plan under that assumption. Next, to describe it accurately, you should determine a 'hubby dies early' age. Examine the hubby's plan at that age, take the balance in both his RRSP and nonreg portfolio and roll it into the wife's plan. Finally, continue on with the wife until her 'best estimated' year of death.

You have to consider income tax in the above calculation, and when you examine the combined 'net worth' (net worth defined as that after tax income which would derive should the couple or survivor die at any point along the way)... you will find it tracks a smooth uninterrupted value.

Hint.... don't use a spreadsheet for this kind of analysis. Tax makes the calculation very awkward.

As yet, there are no joint tax returns in Canada.