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IPP: Create your own pension plan

Fund your retirement while saving on taxes.

Enhance your retirement savings strategy as an incorporated physician

If you’re an incorporated physician, age 45 or over, an individual pension plan (IPP) could offer you an additional way to enhance your retirement assets.

An IPP is a defined benefit pension plan for one person. With an IPP, only the employer contributes to the plan for the employee. If you own a medical professional corporation, your corporation (as the employer) would make the contributions for you (as the employee).

An IPP provides a way to save taxes because the corporation can make tax-deductible contributions and the employee (you) can benefit from tax-deferred growth inside the plan. It also provides a guaranteed retirement income.

IPPs generally make the most sense for practising physicians between the ages of 45 and 65 who have had a corporation for years and who have been using salary as the compensation model.

Compared with a registered retirement savings plan (RRSP), the IPP has a greater contribution limit that increases with age. After the holder of an IPP reaches age 50, the contribution limits are much higher than those for an RRSP, which allows you to save more for retirement in a shorter amount of time.

Because IPPs are subject to pension legislation, you would need an actuarial consulting firm to administer your IPP to ensure it meets governing rules. Your team of specialists at MD can help you understand whether the benefits of an IPP outweigh the burden of the requirements.

Explore the possibilities of an IPP

Your MD Advisor* can help you determine whether an IPP is a good option for you. We’ll help you plan now so you can have greater peace of mind about your retirement income later.