Pension & Benefits Monitor Website
By Sheryl Smolkin
If you are an incorporated business owner over 40 with significant employment income, you should consider setting up an Individual Pension Plan (IPP).
You can make higher contributions to an IPP than to an RRSP, while enjoying the same tax advantages. IPP contributions and operating expenses are tax-deductible and grow within the plan on a tax-deferred basis.
Buck Consultants actuary Norman Frenette explains that age 40 is the “tipping point” where required IPP contributions will start exceeding available RRSP room.
There are 10 good reasons why an IPP makes more sense than an RRSP for people in this situation.