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The focus on contributing to RRSPs from financial institutions’ annual marketing campaigns is usually suited for people who have regular salaries, but may not necessarily work for small business owners, Ms. Wildman says.of only 15.6 percent of Canadian small or medium enterprises That’s because there are alternatives that allow women entrepreneurs – and all small business owners, for that matter – to avoid going into debt, benefit from tax efficiencies, and still contribute to their retirement savings.One option is an Individual Pension Plan , set up in a corporation, says Wilmot George, vice president, tax retirement and estate planning, at CI Investments Inc. in Toronto.
“One of the great things about incorporation is that you accumulate active business income within your corporation,” Mr. George says. “The first $500,000 of active business income in Ontario is eligible forIt can be higher in other provinces such as Saskatchewan, where it’s the first $600,000 of active business income.
Ms. Sutherland says that if a client decides to pay themselves a salary, they will accumulate CPP credits and RRSP contribution room.
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