At what age does an IPP beat an RRSP?

The crossover is typically around age 40, and the advantage widens each year after. Before 40, the RRSP is usually simpler and equal or better.

What is IPP past service?

Funding for years of T4 salary you have already earned. Recognizing past service commonly supports a large one-time corporate contribution — often in the $150,000–$500,000+ range, subject to actuarial valuation.

What are the downsides?

Actuarial and filing costs each year, mandatory funding discipline, and locked-in pension assets. The calculator nets indicative admin costs; the actuary prices the real ones.

IPP vs RRSP

Age 40+? See the extra deductible room an Individual Pension Plan can create over the RRSP limit — and what past service could unlock.

★ CHAPTER BRIEF

An IPP is a defined-benefit pension for one person, sponsored by your corporation. Because funding is actuarially determined by age, from about 40 the deductible room exceeds the RRSP limit and widens every year — at 60–65 it can be two to three times the RRSP ceiling. Contributions, admin fees, and even top-ups after poor markets are corporate deductions.

The RRSP asks everyone the same question: what fraction of earned income may you shelter, capped at one number ($33,810 in 2026). The IPP asks a better question: what does it actually cost to fund a defined benefit for someone your age? For older owners the honest answer is much more.

The second engine is past service: years of T4 salary already on the record can often be funded retroactively — commonly a $150,000–$500,000+ one-time corporate deduction. This calculator shows the indicative annual room at your age, the cumulative gap to retirement, and whether your T4 history points to a past-service opportunity worth a formal actuarial quote.

★ KEY POINT

Only T4 salary creates IPP room — dividends create none. The compensation-mix decision you make in your forties writes the pension you can build in your fifties.

⚠ CAUTION

Every figure on this page is indicative. IPP funding is set by a formal actuarial valuation — ranges here are illustrations from the book, not promises. An IPP also locks in obligations: funding is required, and assets are pension-locked. Ask for the actuary-prepared analysis before deciding.

Your numbers

Your age52

The IPP advantage begins around 40 and widens with age.

Planned retirement age65

Current T4 salary

Only T4 salary creates IPP room — dividends create none.

Years of T4 history15

Drives the past-service opportunity.

Expected return5%

IPP admin cost per year

Indicative IPP room at your age

$48,000–$58,000RRSP limit: $33,810

At age 52, an IPP can typically support $48,000–$58,000 of annual deductible funding versus the RRSP limit of $33,810 — roughly 42% to 72% more room, and the gap widens every year as you age. Funding the mid-band to age 65 at 5% (net of $3,500/yr admin) accumulates about $1,174,907, versus $628,820 on the RRSP path — a difference of $546,088. With 15 years of T4 history, a past-service contribution — often $150,000 to $500,000+ as a one-time corporate deduction — may also be on the table.

★ PAST SERVICE: 15 years of T4 history may support a one-time corporate deduction of $150,000–$500,000+ — subject to actuarial valuation.

⚠ Indicative only: all IPP figures depend on a formal actuarial valuation. Ranges are illustrative, not promised.

Metric	RRSP	IPP (indicative)
Annual deductible room	$33,810	$48,000–$58,000
Advantage vs RRSP	—	+42% to +72%
Accumulated at 65 (mid-band)	$628,820	$1,174,907
Past-service potential	n/a	$150,000–$500,000+ (one-time)

Figures as of July 2026 · Ontario basis · Educational illustration, not advice — confirm current rates with your CPA.

Loading the calculator…

Get your full PDF report

Your inputs, your results narrated in plain English, and the questions to bring to your advisor — sent securely to a verified email. We’ll text you a code first; requesting a report does not create an advisor–client relationship.

Request an advisor match

Questions to ask your advisor

Ask your Actuary

On my exact age, salary history, and T4 record, what annual funding and past-service deduction would a valuation support?

Ask your CPA

How would IPP contributions interact with my corporate cash flow and existing RRSP assets (qualifying transfer)?

Ask your Advisor

Who will manage the IPP assets, at what cost, and how does the underperformance top-up feature work in practice?

Continue in book order

From Chapters 3 & 14Salary vs Dividend Mix Optimizer From Chapter 14CPP / OAS Deferral Optimizer

Educational illustration, not advice. This tool is provided for educational purposes only and does not constitute financial, tax, legal, accounting, or insurance advice. Results are estimates, not promises — hypothetical illustrations are projections only. Figures use Ontario rates as of the date stamped above; rates and limits change. Confirm current figures and your specific situation with a CPA, tax lawyer, and licensed insurance advisor before acting.