Professionals, executives, business owners can benefit
The defined benefit pension plan has pretty much gone the way of the dodo. With one exception: the Individual Pension Plan (IPP). If you’re a business owner or executive, or an incorporated professional, such as a physician, dentist, lawyer, accountant, and so on, and you are over age 40 in your peak earning years, you might consider an IPP. Its many advantages for people in this group certainly outweigh its drawbacks. And as tighter rules for passive investments in private corporations have limited the availability of the small business tax rate, an IPP offers some business tax advantages as well.
Robyn Thompson is featured in The Globe and Mail’s “Financial Facelift” series by Diane Maley. Mark and Meredith are well positioned financially with robust cash flow, and want to retire, but they still have mortgages on rental properties. Should they pay off the mortgages as fast as possible? Read Robyn Thompson’s advice on why that might not be the best idea for the couple at this point in their lives.
Coping with withdrawal risks and benefiting from RRIF rule changes
The onset of the COVID-19 pandemic has thrown many retirement plans into disarray. The collapse of the stock market in March, volatility in bond prices, the crash of energy markets, and the shutdown of virtually all economic activity naturally is causing a great deal of anxiety for those who were planning for retirement this year. But even now, there are financial strategies for pre-retirees and those in the early phases of retirement that can help protect your nest-egg and secure your income streams.
There are flexible alternatives to conventional pension plans for both employers and employees. For employers, offering a Group Registered Retirement Savings Plan (RRSP) as a benefit can be more attractive to potential employees than a registered pension plan. And for business owners, executives, and professionals, an Individual Pension Plan (IPP) can offer enhanced retirement savings over and above an RRSP. READ MORE
This year, the RRSP contribution deadline for getting a 2018 tax deduction is March 1. You still have four weeks to make a contribution, and that’s plenty of time to discuss the best strategy with your financial advisor. To make sure you get the most benefit from your RRSP, there are six key rules that apply all the time, and that I advise my clients follow. READ MORE
Let’s say you’ve accumulated a nest egg of $1 million at age 65, through pension plans, perhaps a significant RRSP, TFSA contributions, some inheritances, and possibly some money left over from downsizing your home. You’re ready to retire, and you have to decide what to do with it to make it last through retirement. Here’s what you need to know. READ MORE
It’s sometimes said that you need at least a $1 million retirement fund to maintain the kind of lifestyle you want after age 65. But starting at, say, age 40, can that even be done? The good news is that it is possible to build a million-dollar retirement fund. But there five important principles you have to follow. READ MORE
When you leave an employer where you had a pension plan, the funds in the plan are transferred to a Locked-In Retirement Account. At times they may also be transferred into a locked-in RRSP. Essentially, these are a special type of registered retirement fund designed to work like a pension plan until you retire. In other words, the plan can hold stocks, bonds, mutual funds, exchange-traded funds, and generally all the qualified investments that can go into a regular RRSP or pension plan. The difference is that you can neither contribute more money nor withdraw funds from the plan. The principle is that these are your retirement funds, and they’ll be locked in until you actually retire, at which point you must choose from a number of maturity options. READ MORE