Individual
Pension Plan
Individual Pension Plan (IPP) for Business Owners: More Savings, Less Taxes
An IPP lets you save more, reduce corporate taxes, and protect your wealth with a CRA-approved retirement plan.
What Is an Individual Pension Plan (IPP)?
An Individual Pension Plan (IPP) is a defined benefit pension plan perfect for incorporated professionals and business owners.
- Grow more wealth for retirement with higher contribution limits than RRSPs
- Use company dollars, not personal income, to build your pension
- Save on taxes since all contributions and plan expenses (including investment management fees) are deductible for the corporation
- Catch up on missed savings by recapturing past service
- Plan for your family’s future by including adult children working in the business and transferring assets to them tax-deferred
- Protect your retirement assets with creditor protection
- Count on predictable income in retirement, even when markets fluctuate
Many business owners follow the same plan: work hard, build their company, and count on selling it to fund retirement. But, there’s always that worry that the market might change or the business won’t sell.
That was Amir’s concern. Most of his wealth was tied up in his company, and the thought of his entire retirement depending on a future sale kept him up at night.
When Amir learned about IPPs, he jumped into action. Instead of leaving all his money in the business, he began moving funds into his IPP, lowering taxes and building his retirement income.
You’ll be happy to hear that Amir did retire comfortably, even though the market in his industry tanked and his business sold for much less than expected.
Without an IPP, he would have faced two hard choices: work years longer than he wanted or settle for a retirement plagued by money worries.
With his IPP, he had the income, flexibility, and peace of mind to retire comfortably on his own terms.
Book your plan review before mid-November to maximize 2025 tax deductions.
RRSP vs IPP – Which is Better?
Quick answer: For higher-earning incorporated business owners, an Individual Pension Plan (IPP) provides more retirement savings than an RRSP. RRSPs cap contributions, but IPPs offer significantly more contribution room, especially as you get older. With an IPP, your savings grow faster and larger over time.
- RRSP contributions: Limited to 18% of income, up to CRA’s cap
- IPP contributions: Increase with age and income, with options for catch-up contributions and top-ups at retirement
- Result: An IPP can provide hundreds of thousands more in retirement wealth.
Maybe you can relate to Jennifer, a 50-year-old incorporated consultant who was earning just over $180,000 a year. She had big dreams for retirement: helping her kids financially as they launched into adulthood, and buying a luxury condo in Vancouver so she could spend her next chapter by the ocean.
But there was a big problem: her RRSP contributions had maxed out. No matter how much she earned, she couldn’t put more in. Every year, she felt like she was falling behind, and the life she pictured for herself slipped further away. Jennifer was convinced that time and the markets were working against her.
She heard about IPPs during a networking event and didn’t waste time getting one in place. With an IPP, her contribution room grew with her age and income.
She put away far more than an RRSP allowed, caught up for missed years, and even added extra contributions at retirement.
By the time Jennifer retired, her IPP had built over $3.4 million in retirement savings, compared to about $2.4 million in an RRSP. That extra million meant she didn’t have to choose between helping her kids and retiring by the water. She did both.
It’s time to discover how an IPP can help you retire with more.
Why Should Business Owners Choose an IPP?
Because it’s the most tax-efficient, secure, and CRA-compliant way for incorporated business owners in Canada to save for retirement.
Sophia, a mid-career architect with her own firm, was earning good money, but every tax season felt like a gut punch due to the staggering amount owing. To manage it, she held back on paying herself more, leaving most of her income in the company. The trade-off was that she wasn’t saving nearly as much as she hoped for her own future.
Adding to the stress, Sophia wasn’t sure what her exit strategy would look like. Would she sell the firm, or simply close it down? She couldn’t count on that money for retirement. And while she knew markets historically perform well over the long term, every dip made her stomach churn. Thinking about retirement had become synonymous with anxiety.
That changed when she set up an IPP. Now, every contribution lowers her corporate taxes while moving money out of the business and into her retirement. Instead of dreading tax season, she feels relieved knowing her money is going somewhere that benefits her future, not just the government.
Stop stressing about retirement, and start saving with confidence.