The retirement hack for doctors and dentists—meet the IPP

If you’re an incorporated doctor or dentist over 40 and your retirement plan is just maxing out your Registered Retirement Savings Plan (RRSP), you might be leaving serious money on the table.

Enter the Individual Pension Plan (IPP)—a defined-benefit pension that’s tailor-made for high-earning professionals like physicians and dentists. It’s not flashy, but it works. Here’s what you need to know.

What is an IPP?

An IPP is a company-sponsored pension plan just for you, funded by your professional corporation.

Instead of being limited by RRSP contribution caps, the amount your corporation can contribute is calculated based on your age, salary, and years of service.

For many doctors and dentists over 40, this can mean putting away significantly more money than an RRSP allows.

Why should medical and dental professionals care?

Here’s why an IPP can be such a powerful tool:

• Higher contributions: The older you are, the more you can contribute—often far beyond what’s possible with an RRSP.
• Corporate tax deductions: Contributions are made by your professional corporation and are fully deductible, lowering corporate taxes while funding your retirement.
• Creditor protection: IPP assets are typically shielded from creditors, adding peace of mind in professions that carry liability risk.
• Catch-up on past service: If you’ve been paying yourself a salary for years, your plan may allow a one-time, sizable “catch-up” contribution for those past service years.

What to keep in mind

Like any strategy, IPPs aren’t perfect. Here are some important considerations:

• Administration: An IPP requires an actuary, legal documents, and Canada Revenue Agency (CRA) filings. It’s more complex than an RRSP.
• Commitment: Unlike RRSPs, IPPs require consistent contributions from your corporation, based on actuarial rules.
• RRSP impact: IPP contributions reduce your RRSP room, but the higher savings potential usually makes this a fair trade-off.

RRSP versus IPP: A quick comparison 

The bottom line

If you’re an incorporated doctor or dentist over 40 with stable income, an IPP may be one of the most effective ways to:

• Save more for retirement;
• Reduce your corporate tax bill; and
• Secure predictable retirement income.

IPPs aren’t for everyone, but for professionals in their peak earning years, an IPP can be a powerful retirement planning tool.

Next steps

We’ve guided medical and dental professionals through the process of setting up and managing IPPs, helping them maximize retirement savings and reduce corporate taxes along the way. If you’re wondering whether this strategy could be the right fit for you, let’s connect. Our team at RBC Dominion Securities can walk you through the numbers and show you how an IPP could strengthen your retirement plan.

If you have questions or would like to discuss your own strategy, I'd be glad to connect for a complimentary call/meeting.

Vincenzo Marozzi

780-935-8637

vincenzo.marozzi@rbc.com