After about age 40, with a steady salary, an IPP often lets you save much more. If you are younger, an RRSP is often simpler.
Individual Pension Plan (IPP)
Individual Pension Plan (IPP) for Business Owners
A pension plan your company pays for, just for you. Your company gets a tax break on every dollar. The money grows with no tax until you take your pension.
What It Is
What is an individual pension plan?
It is a pension plan for business owners. Your company puts the money in, not you. As you get older, you can put in more.
After about age 40, that is often much more than an RRSP allows.
At a glance
- Paid by your companyEvery dollar is a tax deduction
- No tax while it growsTax only when you take your pension
- More room than an RRSPOften, after about age 40
- Catch up on past yearsBack to 1991, if you had a salary
IPP vs RRSP
An IPP lets you save more than an RRSP
The older you are, the more your company can put in.
- RRSP limit
A rough guide. A pension expert works out your exact number.
How It Works
How an IPP works
We set up the plan
A pension expert designs it around your age and salary.
Catch up on past years
Past years with a salary may count.
Your company pays in
It makes a payment each year and deducts it.
You retire
You get a pension from the plan.
Is It Right for You?
This plan can fit you if
- You are 40 or older
- Your company pays you a salaryOften $100,000 a year or more
- Your company makes steady profits
- Your RRSP is fullAnd you want to save more
Good to know
- It needs a salary. Dividends do not count.
- If investments fall short, your company may need to add more.
- The money is locked in for your pension.
Questions
Individual pension plan questions
Your company gets a tax deduction for every dollar it puts in, and the money grows with no tax. You pay tax only when you take your pension.
Yes. An IPP is based on the salary your company pays you. Dividends do not count.
There is a set-up cost and a yearly fee. We tell you the cost up front. Your company can usually deduct it.
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