What is one consequence of withdrawing from a spousal RRSP prematurely?

Withdrawing from a spousal RRSP prematurely has specific tax implications. When one spouse withdraws funds from a spousal RRSP, the tax consequences depend on who contributed to the plan. In the case of a premature withdrawal, the contributing spouse must report the amount withdrawn as income on their tax return. This is because the spousal RRSP is designed to allow the contributing spouse to allocate some of their retirement savings to their lower-income spouse for tax advantages. However, if the funds are taken out before the required period (typically within two years of contribution), the income stream is recognized by the contributor, thereby impacting their taxable income.

Furthermore, the other options provide misleading information. A premature withdrawal will always incur tax obligations rather than being tax-free, and it is not limited to only the spouse accessing the funds or free of consequences. The understanding of these tax implications is essential for making informed decisions regarding retirement savings strategies.