Business Owner - IPP or RRSP?

Avatar of u/retire-free
u/retire-free · Joined Oct 2024

Individual Pension Plan (IPP) can be a fantastic choice for business owner. A good plan will give you plenty of predictability and can yield higher than RRSP.

Last update Oct 2024
  • Scenario 1: Set up IPP
  • Scenario 2: Continue with RRSP
  • Which One Is Higher (%)

This chart compares the "investment value" of both choices (or call it "time value"). See if you expect to live past the cross age to take full advantage of this IPP plan. Tax implications are not accounted for.

Age

Try your numbers:

A =

B =

The proposed one-time cost on your IPP plan, transferred from your RRSP.

C =

D =

E =

F =

G =

H =

I =

This is how much your company currently pays you.

J =

K =

This is the before-tax, inflation-adjusted amount proposed on your IPP plan.

L =
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Time Value Assumptions

Heads Up!

If you're using Cost Basis (cb) for calculating capital gains:

Please be aware that very few countries currently use inflation-indexed cost basis. Double-check your local tax rules before publishing.

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How is Cash Value calculated?

This is your current salary minus IPP contribution minus administration fee.

Decisions / Expectations

(Expressions are evaluated at Year 0 only.)

M̃ =
Now
Follow Inflation
Ñ =
Now
Follow Inflation
Õ =
Follow Inflation
P̃ =
Follow Inflation
Q̃ =
Follow Inflation
R̃ =
Follow Inflation
S̃ =
Follow Inflation
T̃ =
Follow Inflation
Ũ =
∞
Follow Inflation

Calculations

(Expressions are evaluated at every year.)

Ṽ =
W̃ =
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