Wealth Professional forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Notify me of new replies via email
Wealth Professional | 31 Jan 2014, 07:47 AM Agree 0
If the growing fear is Canadians will lean too heavily on their CPP benefits, just as concerning are the number of business owners who won’t be able to lean on them enough, says one seasoned advisor.
  • Kevin Cahill | 31 Jan 2014, 08:51 AM Agree 0
    The critics will say that the government is doing a noble job by creating a forced retirement income savings program, I say they have created a lucrative Ponzi scheme to line their own pockets, sacrificing tomorrow to pay for today's greed. Business Owners Should Avoid the Canada Pension Plan, no doubt in my mind.
  • Mark Matsumoto | 31 Jan 2014, 09:11 AM Agree 0
    Many business owners just own their jobs. We tend to meet the more successful people with an ability to save. CPP costs about $5,000 per year or 10% of $50,000 income, so many are not able to save much more.
    Ontario wants to take more!
    Salaried government workers don't seem to understand average people/business owners as they invent new taxes.
    Governments should pull back and let people look after their own money instead of taxing money out of our hands. There is no talk about the associated pension liabilities that these genius' are willing to take on, on behalf of the relatively few people following the baby boomers!
  • David Christianson | 31 Jan 2014, 10:09 AM Agree 0
    If an IA is actually beign the client's financial planner, they should know the answer to which is the best long-term strategy. If they are deferring to accountants, then they are acting simply as investment advisors and askers of good quesitons. Not good or bad, but we shoud be clear on our terminology.

    In this situation, if th ebusiness onwer is persuing a dividend only strategy in order to have $160,000 a year of retirement income after tac instead of $120,000, for example, missingout on CPP will not cost them any kuxuries (or essentials). Instead, it is the right approach, if that will be the future bottom line. (Often, in our experience, it might be.)

  • Bob T | 02 May 2014, 12:42 PM Agree 0
    Accountants will often suggest dividends only but neglect the other component of that strategy which is to make sure that the clients are using other vehicles to save for retirement. Reducing current income tax is good but neglecting long term savings is not.

    By using a dividend only model the client does not accumulate CPP and also misses out on RSP contribution room. Where will retirement income come from??
  • Kevin Cahill | 03 May 2014, 01:11 PM Agree 0
    Bob, reducing current and future income tax is essential. No business owner should invest in RRSP's it does not make tax sense today or down the road.
Post a reply