Retirement Compensation Accounts provide added benefits for business executives and key staff. They are also the perfect mechanism whereby a firm can assist key members to finance their retirement goals in a tax-effective fashion. Other major benefits of this option include:
- No contribution limits
- No restrictions on payouts
- No impact on registered retirement savings plans, or retirement restoration plan contribution caps either
- Retirement compensation account assets are held in trust and may not be accessed by company creditors, or beneficiaries outside of applicable retirement rules
Retirement compensation accounts should be part of the tools that every well-managed business deploys to retain executive key staff. They are most effective where a business owner, executive or key staff member is associated with a firm generating profits in excess of $200,000. These persons should ideally speaking be between 35 and 50 years of age and be earning total annual incomes greater than $75,000. The benefits are also optimized for individuals older than 50 years provided that their annual incomes exceed $100,000.
Is your firm contemplating supplemental pension and savings plans to attract and keep key staff? Perhaps you have already undertaken to do this. You should be speaking to us about an retirement compensation account model that maximizes company tax benefits while optimizing executive employee tax deferrals too.