Advanced Curriculum Chapter 3_Retirement Planning for Business Owners

Question 1

RRSP RULES - What income qualifies for RRSP contributions?

Answer 1

Salary and taxable benefits, but not dividends or shareholder loan repayments.

Question 2

INDIVIDUAL PENSION PLAN (IPP) - Who is an ideal candidate for an IPP?

Answer 2

Business owners aged 45+ with a corporation, stable cash flow, and T4 income over $100,000.

Question 3

IPP BENEFITS - What are the advantages of an IPP over an RRSP?

Answer 3

Higher contribution limits, creditor protection, tax-deferral, and guaranteed benefits.

Question 4

RETIREMENT COMPENSATION ARRANGEMENT (RCA) - How does an RCA differ from an IPP?

Answer 4

Employer-funded, subject to 50% refundable tax, and not limited by RRSP or pension rules.

Question 5

HOLDING COMPANIES - How can a holding company help in retirement planning?

Answer 5

Defers taxation, controls personal income, and avoids OAS clawbacks.

Question 6

CPP FOR BUSINESS OWNERS - Should business owners contribute to CPP?

Answer 6

Depends on income strategy: Salary provides CPP benefits, while dividends avoid contributions.