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When you’re self-employed, planning for retirement can be a daunting task. Unlike salaried employees, who often have access to company-sponsored retirement plans, self-employed individuals are on their own to ensure they’re saving adequately for their golden years. But worry not – that’s where Individual Pension Plans (IPPs) come into play. Harmer Wealth Management and its team of experienced Financial Advisors specialize in these types of plans, providing the guidance and expertise you need to navigate your retirement planning journey successfully.

What is an Individual Pension Plan?

An IPP is a defined benefit pension plan established for a single person. The plan is typically set up by a corporation for a key employee, often the owner or a shareholder, who is also self-employed. The defining aspect of an IPP is that it provides a guaranteed income stream after retirement, calculated based on the individual’s years of service and their salary history.

Why Choose an IPP?

So, why should self-employed individuals consider an IPP? There are several key reasons:

1. High Contribution Limits

Unlike other retirement savings options, such as RRSPs in Canada or 401(k) plans in the U.S., which have a capped contribution limit, IPPs allow for larger tax-deductible contributions. These higher limits can significantly boost your retirement savings, particularly if you are a higher-income earner.

2. Guaranteed Retirement Income

With an IPP, you know exactly how much income you will receive in retirement. This certainty can make financial planning easier and reduce stress about potential market downturns or longevity risk.

3. Creditor Protection

In many jurisdictions, assets held within an IPP are protected from creditors. This can be particularly beneficial for self-employed individuals, whose personal assets may be more exposed to business risks.

4. Potential for Better Investment Returns

The funds in an IPP are professionally managed, which can result in better investment returns compared to individual investing. The investments within the plan are also tax-sheltered, which can lead to faster growth of your retirement savings.

Is an IPP Right For You?

While IPPs offer numerous benefits, they aren’t right for everyone. They tend to be most advantageous for those in their mid-forties or older, who earn a significant income, and anticipate being in a lower tax bracket in retirement.

Remember, the decision to establish an IPP is a significant one and should be made with professional advice. Harmer Wealth Management and its team of Financial Advisors specialize in IPPs. They can provide you with the guidance and expertise you need to navigate your retirement planning journey successfully.

Start Planning Your Retirement Now with Harmer Wealth Management

At Harmer Wealth Management, we understand the unique challenges self-employed individuals face when planning for retirement. We believe in personalized service, and our dedicated team of Financial Advisors is here to guide you through the process, ensuring you make the right decisions for your financial future.

Whether you’re just starting to think about retirement or you’re exploring ways to maximize your savings, we can help. Contact us today to schedule a consultation and find out if an Individual Pension Plan makes sense for you. Your future self will thank you.

Let’s make your retirement dreams a reality. Together, we can plan for a future that brings you peace of mind and financial stability. After all, you’ve worked hard for it – now let’s make sure you get to enjoy it!

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