Is switching from an RRSP to an IPP the right move for you?
Incorporated professionals such as doctors, lawyers, dentists and entrepreneurs, can now start an Individual Pension Plan (IPP) and make tax-deductible contributions to their retirement, replacing RRSPs and surpassing its limits.
"I would recommend Brian's service to any incorporated professional who wants to feel confident that their retirement years will be financially secure."
Are you eligible for the IPP advantage?
IPP’s are a registered defined benefit pension plan. Any Canadian corporation can establish an IPP for their employees that receive T4 income. IPPs are most beneficial for individuals aged 40 and older due to the higher contribution limits over and above RRSP limits.
To determine if you're eligible for an IPP, book your free consultation with us today, or read our FAQ here.
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STEADILY INCREASE YOUR Retirement fund OVER TIME
IPPs allow annual contributions over and above your RRSP limits for those over 40 years old, with higher contribution limits as you age or if investment returns are not achieved.
Reduce your corporate tax
IPP contributions and related expenses are tax-deductible, allowing you to reduce your overall taxation expense. Plus, investment earnings in the IPP are not taxed until withdrawn.
Retain full control of your investments
You and/or your financial advisor decide on the investments made with your contributions within your desired risk level.
Build a predictable retirement income
Unlike RRSPs, IPPs define a fixed inflation adjusted pension income which provides certainty and peace of mind for your future.
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Protect investments from creditors
Your IPP contributions and assets are protected from creditors under federal and provincial legislation, including any assets transferred from your RRSP.
Enhance your estate planning
IPPs allow you to supplement your estate plan by ensuring your spouse will receive retirement income for life. Upon their passing, any remaining assets in the plan will be distributed to your beneficiaries.
Remain flexible to your changing needs
IPPs are flexible depending on your cashflow, with no minimum contributions required (in certain provinces including Ontario), and the option to rebalance your savings at any time without tax consequence.
Buy-back previous years
Unlike RRSPs, an IPP may allow you to contribute a sizable tax deductible lump sum to the pension plan to “buy back” previous years of service, allowing you to further strengthen your retirement assets.
Grow your retirement fund as you get older.
Plus, you get additional contribution room:
Pay less corporate tax.
Additionally, unlike retained earnings, IPP portfolios can be rebalanced at any time without tax consequences.
Switch to the "Bigger and Better RRSP"
Calculate your IPP advantage
See for yourself! Here is a table comparing IPP Contribution Limits to RRSP Contribution Limits by age at “year 1” (excluding contribution for past service), based on the shown age and maximum eligible T4 salary of $187,833.50 (in 2025).
Don't miss out on your one-time catch up contribution to reflect past service! You may be able to contribute an additional $600,000.
AGE AT YEAR ONE
IPP CONTRIBUTION LIMITS
RRSP Contribution Limits
IPP ADVANTAGE
AGE AT YEAR ONE
IPP ADVANTAGE
Projected Contributions for 40 Yr Old Who Establishes an IPP in 2025
IPPs are simple to set up and maintain
- 1Book your free consultation and get a custom calculation of your IPP advantage
- 2Sign an actuarial services agreement , then send your details securely
- 3Your IPP is registered with the CRA so that you can begin your pre-tax contributions (including buy-back of previous years)
- 4You or your financial advisor make all the Investment decisions
- 5As required by the CRA, we manage your annual IPP filings for administration and perform an actuarial valuation every 3 years
Are you ready to get serious about retirement?
Book your free consultation with Brian Noy FSA, FCIA, MBA to get started with your new IPP.
