Secure your future, enjoy your retirement.
What is a Supplemental Executive Retirement Plan (SERP)?
A Supplemental Executive Retirement Plan (SERP) is a non-qualified deferred compensation plan designed to provide key executives with additional retirement benefits beyond those offered by traditional registered pension plans or RRSPs.
Non-Qualified:
SERPs are not subject to the same stringent regulations as registered pension plans. This offers greater flexibility in plan design, but also means contributions are not tax-deductible for the employer until benefits are paid to the executive.
Deferred Compensation:
Benefits earned under a SERP are typically deferred until retirement or termination of employment. This allows executives to defer taxes on their benefits until they are in a lower tax bracket.
Customized:
SERPs can be tailored to the specific needs and goals of individual executives. This allows for greater flexibility in terms of benefit levels, vesting schedules, and investment options.
Attraction and Retention Tool:
SERPs often include vesting provisions, meaning executives must stay with the company for a set time to get full benefits, thus serving as a strong retention tool.
Tax Implications:
Though SERP benefits are taxable when received, delaying compensation can result in tax deferral benefits if the executive is in a lower tax bracket upon retirement.
How Do You Do Retirement Planning?
Retirement planning is the process of setting financial goals for your retirement and taking steps to achieve them. It involves a combination of saving, investing, and managing your expenses. Here’s how we approach it:
Set Your Goals
We begin by discussing your retirement goals, including when you want to retire, the lifestyle you envision, and any specific financial needs or commitments you foresee.
Assessing Your Current Financial Situation
We evaluate your current financial position by reviewing income, savings, investments, expenses, and liabilities. This helps us understand your starting point and what adjustments might be necessary.
Estimating Future Retirement Needs
Using your goals and current financial data, we project your future expenses, taking into account inflation, healthcare costs, and other factors that might impact your financial needs during retirement.
Developing a Savings and Investment Plan
Based on your future needs, we create a tailored savings and investment plan. This plan outlines how much you need to save regularly and recommends investment strategies to help grow your wealth over time.
Optimizing Retirement Accounts
We review existing retirement accounts, such as RRSPs, TFSAs, or company pensions, to ensure they are aligned with your retirement goals. We may also suggest additional accounts or investment vehicles to optimize tax advantages and potential returns.
Incorporating Risk Management
We factor in risk management by ensuring you have adequate insurance coverage and a diversified investment portfolio. This helps protect your retirement savings from unforeseen events and market volatility.
Regular Reviews and Adjustments
Retirement planning is not a one-time event. We regularly review your plan to ensure it remains aligned with your goals and adjust it as needed based on changes in your financial situation, life events, or market conditions.
Asset Protection
RCAs can provide a degree of asset protection for retirement funds. Assets held within an RCA are typically segregated from the employer's general assets and may be protected from creditors in the event of bankruptcy or other legal actions.
Business Continuity
RCAs can help ensure business continuity during times of transition, such as the retirement of a key owner or executive. By providing a clear plan for succession and continuity of operations, RCAs can help mitigate disruptions and maintain stability within the business.
Competitive Advantage
Offering RCAs can give small businesses a competitive edge in attracting and retaining top talent, especially in industries where skilled professionals are in high demand. RCAs demonstrate a commitment to employee well-being and long-term financial security, which can differentiate a small business from its competitors.
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Why Choose Us
Our seasoned team of financial planning, tax, and insurance experts specialize in using insurance products like IPPs and RCAs, as well as implementing supplemental executive retirement plans. These, along with other tax-efficient solutions, help minimize the impact of recent changes to the income tax act on passive income. With taxes on passive income potentially reaching 53%, and a higher capital gains inclusion rate of 66%, it’s crucial to explore these strategies to reduce your tax burden.
Our Services
Retirement Compensation Arrangements
Retirement Compensation Arrangements are employer-sponsored plans that provide financial support to employees after they retire.
Individual Pension Plans
Individual Pension Plans offer defined benefit pensions tailored for individual employees, often used by professionals in the medical field.
Additional Insurance Services
Our range of insurance services includes estate planning, strategies for reducing taxes, and comprehensive wealth management.
Risk-Adjusted Investment Returns
Risk-Adjusted Investment Returns assesses the returns of an investment in relation to its risk, helping to determine its overall profitability.
Tax Planning
Tax Planning involves creating strategies to reduce tax liabilities through informed financial choices.
Tax Minimization Strategies
Tax Minimization Strategies are methods designed to legally and ethically lower tax burdens.
Tax Compliance
Tax Compliance ensures that all tax laws are followed by accurately reporting financial information and paying taxes promptly.
Tailor Your Retirement Strategy Today
Take control of your financial future with our supplemental executive retirement plans. Our team of seasoned professionals is committed to creating an executive retirement plan that complement your unique goals and aspirations while optimizing tax efficiency. Contact Executive Retirement Planning today for a personalized consultation and learn more how we can empower you to achieve your goals.
