TORONTO, ONTARIO -- (Marketwire) -- 11/17/12 -- To mark Financial Literacy Month, BMO Financial Group is releasing a series of financial tips throughout November. As part of BMO's commitment to 'Making Money Make Sense', the tips are designed to help individuals and families save and manage their day-to-day finances more effectively.

BMO's Tip of the Day: Take advantage of spousal RRSPs.

Using spousal RRSPs to make an RRSP contribution can be an effective incoming splitting strategy for helping to defer taxes right away and reducing the overall taxes in retirement.

"Spousal RRSPs offer individuals an opportunity to take advantage of Canada's graduated income tax system in order to minimize a household's overall tax burden in retirement," said Marlena Pospiech, Senior Retirement Strategist, BMO Financial Group. "By aiming to equalize each spouse's retirement income as much as possible, the overall family tax bill may be reduced by keeping both spouses in a lower tax bracket. This is one of the few income-splitting options still available to Canadians, and it is especially beneficial when most people need it - in retirement."

The spouse who expects to have a higher level of income at retirement uses his or her own contribution room to contribute into a spousal RRSP account in his or her partner's name. The spouse who makes the contribution benefits from the tax deduction, while the partner in whose name the spousal RRSP is registered owns the account. If the spouse who makes a contribution has a significantly higher income now, or expects to have a significantly higher retirement income, a spousal RRSP in the name of the lower-income spouse can result in significant overall household tax savings by splitting income in retirement.

Should a couple divorce, spousal RRSPs are treated the same as the rest of a family's assets. A couple's RRSPs may be evenly split and transferred tax free, so in most instances contributing to a spousal RRSP is no different than contributing to an RRSP in your own name.

"CFEE commends BMO's ongoing efforts to support Financial Literacy in Canada and promote ways in which Canadians can increase their competence and confidence when managing their personal finances on a day-to-day basis," said Gary Rabbior, President, Canadian Foundation for Economic Education (CFEE).

For more information on retirement: www.bmo.com/retirement.

BMO Financial Literacy Month Tips

November 1: Maximizing TFSA investments annually over 20 years can save nearly $30,000 in taxes.

November 2: Utilize rewards to squeeze the most value out of every dollar you spend this holiday season.

November 3: Choose an investment advisor who is right for you and will help you meet your financial goals.

November 4: Use your RRSP to help make the down payment on your first home.

November 5: Space out payments to avoid cash-flow problems.

November 6: Take advantage of the benefits of preferred shares.

November 7: Consider investing in a Registered Retirement Savings Plan (RRSP) and taking advantage of tax incentives when saving for retirement.

November 8: Take advantage of Canada's numerous online personal finance resources.

November 9: Before you head off on your winter vacation, be sure you and your family are properly covered in the event of a medical emergency.

November 10: Understand what you can hold in your RRSP.

November 11: Stick to the one-third rule when planning the purchase of a home.

November 12: Secure your retirement by opening a Registered Retirement Savings Plan (RRSP) as early as possible and contribute to it on a regular basis.

November 13: As couples prepare for their wedding day, they should have "The Financial Talk" to help the transition from "my money" to "our money."

November 14: Using a combination of a credit card, debit card and cash will give you convenience, security and flexibility when you travel or shop in the United States.

November 15: Give the gift of securities and benefit from tax savings.

November 16: To stay on track to reach your financial goals, keep a well-diversified investment portfolio.

For more on financial literacy, Canadians can visit the Government of Canada's Financial Literacy Month website, as well as BMO's Financial Literacy online resource.

About BMO Financial Group

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $542 billion as at July 31, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.