One of the things we often see with incorporated professionals and entrepreneurs is that they’re utilizing their RSP (Retirement Savings Plan) as their number one vehicle for retirement savings. For most entrepreneurs, this isn’t the most tax-efficient way to save for retirement.
With an RSP, what you’re essentially doing is going into business with the government, and you have no idea how much of your business they are going to take on the back end. An RSP is a vehicle whereby you get a tax deduction when you put money in, but you have to pay tax on that money when you pull it out.
If you’re an incorporated and financially successful individual, you’re likely going to be in a high tax bracket when you pull money out of your RSP. You may even be at a higher tax bracket than you’re in today, depending on your income in retirement and if the government decides to change those brackets in the future.
If you have a corporation, we recommend leaving your money in your corporation and utilizing your corporate structure to get the maximum benefit of tax-deferred growth. At Ocean 6, we have innovative ways of helping our clients invest for retirement and take money out of their corporation in a tax-efficient way.
If you want to learn how to effectively structure your retirement utilizing your corporation, visit our Contact Page to book a call, we’d love to talk through your goals.