The Personal Pension Plan™ (PPP®) is a solution for Canadian business owners offering the greatest tax deductions available under legislation and the maximum accumulated savings for your retirement — surpassing all other retirement savings methods like TFSAs, RRSPs and IPPs. Below is a sample case study for how the personal pension plan works for an individual.
Case Study
Let’s consider a 50-year-old Incorporated professional with 20 years of past services and average historical T4 income of $100,000/year, who expects to continue to work for the next 20 years earning a minimum $140,000 of T4 income. As per the graph to the right, under a PPP®, this Incorporated professional will be retiring with an extra $1,660,000 in their retirement fund, compared to what would have been accumulated in their RRSPs alone.
PPP® VS. RRSP (based on 2019 projections) The PPP ® gives you access to higher retirement income
PPP® vs. RRSP (based on 2019 projections)
How is this gap achieved?
Regardless of your age, your annual RRSP contribution limit remains constant each year. By contrast, as you get older, your annual PPP® contribution limits grow and exceed those under RRSP rules. The table illustrates extra contribution allowed in the PPP® at different ages. (You can set up your PPP® as late as age 71.)
Contributions (based on 2021 projections)
And there is more…
Additional annual contributions explain a large part of the extra savings created by the PPP®, but is only one of many additional factors that generate this wealth increase. Other pension specific tax-deductions include: past service buy back, special payments, fee deductibility, terminal funding, etc. as illustrated in the infographic on the right.
Contact us to find out more about the PPP® and to prepare your own PPP® illustration.
Case Study for the Personal Pension Plan
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