An IPP (Individual Pension Plan) is a tool that can replace an RRSP (Registered Retirement Savings Account) for small business owners. So which one is better to hold your investments in?
Why consider an IPP (Individual Pension Plan).
- As you near retirement the contribution limit is greater than that of an RRSP
- In some circumstance IPP’s behaves differently in your estate.
- Can be used in different tax planning strategies (Accountant is recommended to discuss these, but can include under funding to devalue a business)
Why would you not want an IPP (Individual Pension Plan)
- Annual fees are due to maintain IPP’s
- Many more rules and restriction than an RRSP
- A more complicated tool to understand.
If you are considering an IPP I would recommend talking to both an investment professional that understands this tool and an Accountant that can explain the tax benefits. These can be a great tool if understood and used in the right planning situation.
