PPP – Personal Pension Plan

By | Business Services, Retirement Income Solutions | No Comments

Personal Pension Plan (PPP) – The best-kept secret in retirement planning?

Historically, owners, senior executives & many government employees were provided generous pensions that guaranteed lifetime retirement income. Their companies would make significant deductible contributions every year in order to fund a pension plan to guarantee a certain amount of income in retirement.

Did you know that your small business or professional corporation could do the same thing for you?

A PPP offers a solution for small business owners to create their own defined benefit pension so that while you are focused on your income today, you know you will be set for your future retirement.

Below is a summary of this powerful tool, including how it works, who it is right for, and the various tax and other benefits.

WHAT IS A PPP AND HOW DOES IT WORK?
  • PPP is a personal pension plan that allows you to save more than a traditional RRSP
  • PPP allows a business owner to fund their own pension plan through their business
  • All contributions are deductible business expenses as are any costs associated with the pension plan (ie. Actuarial fees, management fees etc)
  • PPP is similar to an IPP (Individual Pension Plan) but allows greater contribution flexibility
AM I A CANDIDATE FOR A PPP?
  • Do you own a professional corporation or other business?
  • Are you currently maximizing your annual RRSP contributions?
  • Are you looking for ways to save additional monies on a tax-deferred basis for your retirement?
  • Does your annual T4 income exceed $120,000?

If you answered yes to the above questions, then you are a candidate for a PPP

KEY BENEFITS OF A PPP
  • Increase in contributions that can be made into a retirement fund to grow on a tax-deferred basis
  • Ability to make a catch-up payment for an increased room in the first year of setting up of PPP, generating a large corporate deduction and a bump in asset base for tax-deferred growth
  • Deductibility of fees and expenses related to PPP at a business level
  • Terminal funding amount that can generate additional corporate deduction while providing significant funds for retirement
  • PPP can be terminated and pension income initiated, prior to actual retirement
  • Transferability of PPP if the company is sold without a hassle
  • The flexibility of annual contributions in the event cash flow is limited in certain years
  • Assets inside a PPP can pass from generation to generation without triggering a deemed disposition
  • Assets inside a PPP are trade-creditor protected

To receive a customized quote and talk to an advisor please click here and someone will reach out to you within one business day.

Estate Planning

Your Estate Plan: Creating a Legacy, While Preserving Your Wealth

By | FAQ, Group Retirement Programs, Group Services, Retirement Income Solutions | No Comments

Many of our clients are reaching a new phase in their lives where they are thinking about their own estate plans. The reality is that many of us will live as long in retirement as we’ve spent in our working lives. Even for those considering semi-retirement, this can have a direct impact on your retirement income and lifestyle, and what you leave as a legacy for your children and grandchildren.

Based on recent statistics, living to age 100 is more likely than you might have expected.

Is 100 the new 85?
Probably at 65 of living to the following ages:

80 Yrs Old

91%

85 Yrs Old

77%

90 Yrs Old

53%

95 Yrs Old

24%

Retirement today is different from the traditional ideas of retirement in the past. There has been a shift away from Defined Benefit Pension Plans, and reductions to Government Programs. The burden has shifted back to individuals to generate their own income in retirement. Even if you are prudent enough to have saved over the years, traditional investing does not allow you the certainty that your money will last, and there will be something left for future generations.

How would you like to spend all of your assets in retirement and still leave a legacy to the next generation?

An ideal retirement plan is one that allows you to maximize your retirement income and still provide the legacy that you hope to leave for your loved ones. A simple strategy that is often overlooked is the use of permanent life insurance. Life insurance can act as ‘Retirement Insurance’, allowing you the flexibility to maximize your retirement income during the living years, with the comfort of knowing that a guaranteed benefit is always there to complete your estate plan.

Consider this: A healthy couple aged 60 could allocate less than $14,000 per year from their estate or other assets in order to guarantee a legacy of $1,000,000 tax-free to their heirs. You can also allocate a larger amount over a fixed period of 10 or 20 years, with a guaranteed benefit locked in and assured to be there for your family.

What is your tolerance for outliving your money?

To secure your plan even further, many people are allocating a portion of their retirement assets into an Annuity, or an investment fund that provides a guaranteed income for life. These solutions can provide a tax-efficient, guaranteed lifetime income, with the potential for growth if the investment markets perform well. Combined with life insurance, this combination allows you to enjoy your retirement knowing that you will never outlive your money, and there will always be a significant estate for your loved ones.

Contact us to find out how we can help you to create an estate plan that is designed to meet the needs of your family, your heirs, your business interests as well as any philanthropic considerations.