The Way of the Future: IPPs for Business Owners and Incorporated Professionals Today
In a recent blog post, Mike Vanderburgh at Newport Private Wealth highlighted the importance of Individual Pension Plans (IPPs) as a possible retirement savings solution for business owners and incorporated professionals.
Here are some of the main points that were made:
- IPPs have been garnering more attention lately, linked with changes to passive income rules for holding companies and professional corporations;
- IPPS can be effective for certain individuals to save for their future, “shifting tax-deductible funds from the corporation to a pension, where they can be invested on a tax-deferred basis until retirement. This differs from an RRSP, where the individual can contribute funds and receive a tax deduction personally.”-Vanderburgh;
- In most cases, more funds can be contributed to an IPP than can be contributed to an RRSP
Besides generating more tax-deferred income leading to more assets in the IPP when the professional retires, some other benefits are:
- improved creditor protection; and
- the significant benefit of being able to pass the IPP’s assets to surviving children employed at the company.
Call us today to learn more about IPPs and your future.
E. & O. E.