Personal/Corporate Wealth Transfer on Sale of Business

According to the federation of Independent Business 70% of business owners are looking to retire before 2014. Of that 70% only 10% have an organized succession plan and 30% of the business owners are looking to sell their business to fund their retirement.

At Investors Group we have a “Strategic Plan” specifically designed for small to medium size businesses and franchise owners. It incorporates an Individual Pension Plan (IPP), a Health Spending Account (HSA), and the Investment management expertise of the Investors Group Masterseries.

What exactly is an IPP? An IPP is a defined benefit pension plan for one or more people and funded by the employer. Contributions to an IPP are greater than a traditional RRSP and grow with income and age, but more importantly, and unlike an RRSP, is creditor proof.

An IPP is actuarially calculated based upon age, income, interest rates and inflation so that upon retirement the IPP plan holder knows precisely what his or her retirement income will be.

So who qualifies for an IPP? An IPP candidate must be a business owner manager and at least 40 years of age. There must be a bona fide relationship between employer and employee, and the employer’s incorporated company. The candidate must have T4 income in excess of $112,000 per year and must already be maximizing their RRSP.

Our Strategic Plan also incorporates a Health Spending Account (HSA) and unlike insurance policies where premiums have to be paid in advance, the HSA only requires a payment to be made when a claim is submitted. Therefore the corporation takes advantage of much better cash flow opportunities and since the claim is paid in pre-tax dollars the savings can be re-directed to the IPP.