Benefits of an IPP
Higher contribution limits than with an RRSP:
Individual Pension Plan (IPP) contributions are based on age, length of service, and earnings and increase each year. After age 40, IPPs are typically more advantageous than RRSPs for business owners who want to save tax and save for retirement.
Potentially hundreds of thousands of dollars in additional tax savings:
Similar to RRSP ‘catch up’ contributions, IPP ‘past service top-up’ contributions can be made for the business owner’s years of service dating back to 1991, even if the IPP was not set up until a later year. This can amount to several hundred thousand dollars of tax deductible contributions in some cases.
In addition, if you decide to retire or sell the business, you may have the opportunity to make an additional lump sum contribution to the IPP. This could result in another $300,000 to $500,000 in additional tax deductible expenses in the year of retirement.
Selling your Business? IPPs can be an excellent planning tool to help minimize taxes owing in the year you sell your business.
Reduced uncertainty about retirement income:
Because IPPs are ‘defined’ benefit plans, you can feel confident knowing there will be a steady stream of income upon retirement.
Assets are creditor-protected within an IPP: You can rest assured that at least a portion of your retirement capital is protected.
FREE IPP EVALUATIONHow much could you save for retirement? Click here for a no cost, no obligation assessment.
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Financial Post ArticlePension plan a way to ease RRSP losses in 2008. Some other options to consider.
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January 31, 2011RRSPs vs. IPPs
A look at the similarities and differences between these two retirement savings plans.» More
August 14, 2010Globe & Mail Article
Doctor needs estate-planning prescription by Andrew Allentuck» More
October 26, 2009Retirement advantage: Company-funded plan beats RRSP on savings, Financial Post Article by Rick Spence.
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