EP297 Individual Pension Plans as a Path to Entrepreneurial Security

The Cash Rich Exit Podcast

Welcome to The Cash Rich Exit Podcast, where I, Colleen O’Connell-Campbell, guide you - ambitious CEOs, founders, and business owners - through critical entrepreneurial financial transitions. Today’s episode is especially important for those of you over the age of 40 with a significant T4 income, as we explore an exceptional tool for securing your financial future: the Individual Pension Plan (IPP).

🌟 Why Consider an IPP?

The IPP offers a suite of benefits tailored for business owners aiming to maximize their retirement savings while minimizing taxes. I cover the breakdown in the episode including:

Tax Advantages: Contributions made by your corporation are tax-deductible and grow on a tax-deferred basis, providing a potent mix of immediate and long-term tax savings.

Higher Contribution Limits: Unlike RRSPs, IPPs allow for higher contribution limits, which increase with age, making them an excellent option for those looking to catch up on their retirement savings.

Creditor Protection: Enjoy peace of mind knowing your retirement savings in an IPP are protected from creditors.

Flexible Retirement Options: IPPs provide flexibility in terms of retirement age and benefits, aligning perfectly with personal and business exit strategies.

📊 How Does an IPP Work?

Funding: Your corporation funds the IPP, ensuring sufficient assets to provide the required retirement benefits, with contributions determined by an actuary.

Investment: While IPP funds can be invested similarly to those in an RRSP, they come with certain restrictions due to pension legislation. The funds must be managed under a "prudent investor" standard, focusing on diversification and risk management.

Retirement: Upon retirement, the IPP can begin making pension payments directly to you, or the commuted value can be transferred to another retirement savings plan. These payments are eligible for pension income splitting and tax credits, optimizing your financial benefits.

Remember, planning early for your exit and retirement is about securing financial freedom and ensuring a smooth transition to a comfortable retirement. Do seek out opportunities to enhance your financial well-being with tailored, sector-specific advice.

I am your host - Colleen O’Connell-Campbell: Connect with me on LinkedIn

📞 Book a 1:1 Wealth Gap Analysis with Colleen

Planning to exit your business in 5-10 years? Evaluate and close your wealth gap. Book a 1:1 Wealth Gap Analysis session with me via LinkedIn today and start your journey towards a cash-rich exit!

Thank you for tuning in to The Cash Rich Exit Podcast. If you’ve found this episode enlightening, please leave us a five-star rating 🌟🌟🌟🌟🌟 and share your thoughts.

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The Cash Rich Exit Podcast is brought to you by O’Connell-Campbell Wealth Management at RBC Dominion Securities.

All opinions expressed by the host, Colleen O’Connell-Campbell, and podcast guests are solely their own opinions and do not reflect the opinion of RBC Dominion Securities.

This podcast is for informational purposes only before taking any action based on information in this podcast you should consult with a qualified professional.

Colleen O’Connell-Campbell is a Wealth Advisor at RBC Dominion Securities, a member of the Canadian Investor Protection Fund.