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49.8% – Are You Paying the Max Tax?

Are you paying the highest tax rate?

If you own your own company, there is a solution.

Tax-deductible Individual Pension Plans (IPPs) can be funded by your company. The benefits payout to you when you retire. Retirement can start between the ages of 55 and 71.

An IPP also has several business tax advantages allowing more of the company’s earnings to be tax-deductible. This is especially interesting if you are planning to sell your business in the next few years.

IPPs take some work to set up – but, it also takes work to earn money. If you’re like most owners, it took years of hard work to build the business up. Now the government wants you to pay 49.8% income tax. You need a solid strategy to fund your retirement.

Well designed IPPs aim to fund the lifetime maximum pension benefit allowed under the Income Tax Act. Even when RRSP contributions have already been maximized!

Employee Eligibility

Companies can also set up IPPs for minority owners and key employees. The employer can decide which employees will be provided with an IPP, but this type of pension plan is generally offered to connected employees only. A connected employee is defined as an employee who owns, directly or indirectly, ten percent or more of the company’s equity – or a directly related company.

IPP advantages include:

  • significant contributions for service prior to plan implementation

  • assets within the IPP are creditor proof

  • money borrowed to fund the IPP, set-up costs and ongoing administration expenses are tax-deductible to the employer

  • IPP assets may be topped-up in the event investment returns are inadequate to fund the IPP benefits

  • early retirement can be funded by a lump-sum tax-deductible contribution

  • retirement benefits can be paid in various forms specifically tailored to the individual

  • the corporation has 120 days after its year-end to make an IPP contribution


Anchor Pacific Investment Management Corp. (“Anchor Pacific”)  is a Vancouver, BC-based portfolio management firm, which leverages process, technology, and infrastructure to democratize the process of managing endowment and pension style investment portfolios to deliver innovative, high-touch, and transparent investment programs across the full spectrum of asset owners and investment consumers.

To learn more about how Anchor Pacific can help you shelter, protect, and grow your money, contact us at 604-336-9080 or


Aligned Capital Partners Inc. (“ACPI”) is a full-service investment dealer and a member of the Canadian Investor Protection Fund (“CIPF”) and Canadian Investment Regulatory Organization ("CIRO"). Investment services are provided through Anchor Pacific Investments, an approved trade name of ACPI. Only investment-related products and services are offered through ACPI/Anchor Pacific Investments and covered by the CIPF. Financial planning and insurance services are provided through Anchor Pacific Wealth Management. Anchor Pacific Wealth Management is an independent company separate and distinct from ACPI/ Anchor Pacific Investments.

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