Planning for retirement is a critical goal for owner-managers operating a business within a Canadian-controlled private corporation (CCPC).
In our comprehensive ebook, “Pension Options for the Canadian Business Owner-Manager’s Retirement,” we explore three key pension strategies to ensure a secure and well-funded retirement: Registered Retirement Savings Plans (RRSPs), the Canada Pension Plan (CPP) or Quebec Pension Plan (QPP), and Individual Pension Plans (IPPs).
Registered Retirement Savings Plans (RRSPs): RRSPs offer flexibility and tax advantages. Contributions are tax-deductible, and growth within the plan is untaxed until withdrawal. They provide a portable and easy-to-manage retirement savings option, with the ability to contribute up to 18% of your earned income, up to a legislated annual limit.
Canada Pension Plan (CPP): As an owner-manager, you are responsible for both the employer and employee portions of CPP premiums. While dividends may be a favorable option for those nearing maximum contributions, younger business owners should consider the benefits of diversifying retirement income sources and the long-term advantages of CPP contributions.
Individual Pension Plans (IPPs): IPPs are tailored, defined benefit pension plans set up by the employer corporation, ideal for those with a long service history and substantial past service funding requirements. Contributions to IPPs are tax-deductible for the corporation and provide a structured retirement plan, especially beneficial for entrepreneurs over 50.
Each pension option requires a thoughtful approach to your annual remuneration strategy, especially if retaining corporate profits. Explore how these strategies can be effectively implemented within your business to secure your financial future.
Take control of your retirement planning today. Download “Pension Options for the Canadian Business Owner-Manager’s Retirement” now to make informed decisions for a secure future.