Calculator
IPP or RRSP: what each leaves you
An individual pension plan lets your corporation fund a pension for you, deducted from its income, in place of your RRSP room. See what it leaves you next to saving in your RRSP, with every year's personal and corporate tax across 2,000 simulations of markets.
Your numbers
Kilter works this out right here in your browser, so the numbers you type stay on your device.
What each choice leaves you
Worked out with 2,000 simulations for the numbers above.
- RRSP. Your corporation pays you $187,900 a year. You save what you don't spend in your RRSP, TFSA and other investments, as Kilter works out.
- IPP. The same salary, and your corporation pays into an individual pension plan each year, as much as the rules allow. It pays you a pension from when you retire (55 at the earliest), smaller for each year before 65. Your RRSP room all but goes. It also buys back your 10 past years, a pension of $37,580 a year, paid for from your RRSP first.
Saving in your RRSP, your chance of success is 69%. You'd leave $1.9 million after tax, and tax over a lifetime comes to $2.6 million.
The IPP leaves $1.8 million after tax, about $140,000 less than the RRSP. Tax over a lifetime comes to $2.9 million, about $265,000 more. The chance of success is the same.
With the IPP, your corporation's tax over a lifetime comes to $260,000 (about $303,000 less), your personal tax to $2.4 million (about $582,000 more) and the tax at death to $243,000 (about $14,000 less).
| Choice | Chance of success | Estate after tax | Tax over a lifetime |
|---|---|---|---|
| RRSP | 69% | $1.9 million | $2.6 million$1.8 million yours, $564,000 the corporation's, $257,000 at death |
| IPP | 69% | $1.8 million | $2.9 million$2.4 million yours, $260,000 the corporation's, $243,000 at death |
Estate and tax in today's dollars, assuming typical returns.
- RRSP
- IPP
- Half the simulations end inside the band (RRSP)
How Kilter handles the IPP
Each month it pays you, your corporation pays into the IPP what the rules allow for a plan like yours: the cost of the pension that month's pay earns. It deducts it from its income.
The pension is 2% of your average salary over your final 3 years for each year of service, up to the tax rules' limit. It's full at 65 and 5% smaller for each year before.
Each year's pension earned is a pension adjustment, so your new RRSP room all but goes. Past years bought back are paid for from your RRSP first, then by the corporation.
From when you retire, the IPP pays your pension and your corporation pays in what the fund is short. From the year you turn 72, it pays at least a minimum each year, like a RRIF.
The $187,900 salary in the numbers above is the one that earns the most RRSP room. Kilter leaves out the actuary's and the plan's fees, which your corporation would pay.
Your own plan
This calculator is one person and a few numbers. A plan in Kilter has your real accounts, your partner, your home and every event ahead, worked out the same way, and the assistant to try ideas with.
How Kilter works it out
Kilter runs your numbers month by month from November 2026 to age 95, with each year's federal and provincial tax, the corporation's own tax and the tax at death. The chance of success is the share of 2,000 market simulations in which every expense is paid. Everything else assumes typical returns, in today's dollars with 2.5% inflation. Every account is invested 80% in stocks and 20% in bonds. It's one person, without a partner, children or a home.