INDIVIDUAL PENSION PLAN (IPP)
Fund Your Retirement While Saving On Taxes
An IPP provides a way to save taxes because the corporation can make tax-deductible contributions, and the employee (you) can benefit from tax-deferred growth inside the plan. It also provides a guaranteed retirement income.
WHO CAN OPEN AN IPP:
IPPs are designed for incorporated business owners and incorporated professionals.
Individuals over the age of 40 who earn a T4 income
Incorporated business owners and family members
Incorporated professionals
Small businesses with sufficient cash flow to fund the IPP
Senior Executives
KEY BENEFITS
Higher Contribution Limits Than RRSPs
IPP contributions typically exceed RRSP limits, especially for individuals over 40.
Tax Deductible Contributions
- Contributions are fully tax-deductible for the corporation, reducing taxable income.
- Pension fund assets grow on a tax-deferred basis.
Creditor Protection
Unlike RRSPs, IPPs provide strong protection from creditors, securing retirement savings.
Past Service Contributions
Ability to make retroactive contributions for past service years prior to the creation of the IPP- further increasing retirement savings.
Predictable Retirement Income
Unlike market-dependent RRSPs, IPPs provide a stable, pre-defined retirement benefit.
Corporate Tax Efficiency
IPP contributions are an effective way to extract corporate funds on a tax-efficient basis.
This article is for informational purposes. Each individual’s needs are unique and warrant a customized solution. We would be pleased to discuss your specific situation to identify the best strategy for you. Contact your ZLC Advisor for more information.
Linda Metcalfe
Financial Associate, ZLC Financial
Linda is an experienced financial advisor who helps take the confusion and mystery out of insurance and financial products. She has built a career based on kindness and empathy, and her focus is on relating to clients and their worries. It gives her great satisfaction to know that her clients have a sound financial plan for the future, as well as the correct insurance products for the unforeseen life events that can take us by surprise.
