beyond MD with Dr. Yatin Chadha
Re-examining pension plans for professionals with Jason Pereira
Jun 20, 2024
In this conversation, Jason Pereira, an award-winning financial planner with deep expertise in pension strategies, discusses Individual Pension Plans (IPP) and their benefits for professionals. He explains the distinctions between defined benefit and defined contribution plans and identifies who is best suited for an IPP. Jason also highlights common financial mistakes among business owners and the potential improvements in Canada’s financial planning landscape. Additionally, he shares insights on the importance of continuous learning and personal growth in achieving financial success.
58:33
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Quick takeaways
- The Individual Pension Plan (IPP) is a defined benefit plan tailored for incorporated professionals over 40, offering significant tax advantages and retirement benefits.
- Understanding the differences between defined benefit and defined contribution plans is essential, as DB plans, like the IPP, guarantee retirement income based on salary and service history.
Deep dives
Understanding Individual Pension Plans (IPP)
An individual pension plan (IPP) is a type of defined benefit plan specifically available for incorporated professionals over the age of 40 who pay themselves a salary. Contributions to the IPP are determined by the salary taken and the number of years of service within the corporation. This form of pension plan allows funds to grow tax-sheltered, making it an attractive option for those looking to enhance their retirement benefits. However, IPPs also come with setup and maintenance costs that should be accounted for when considering their viability.
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