What is a Personal Pension Plan (PPP), and Why Should Physicians Consider It?
A Personal Pension Plan (PPP) is a sophisticated retirement solution designed for incorporated professionals like physicians. It combines the best features of both defined benefit and defined contribution pension plans, offering a hybrid structure that grows with you throughout your career.
Unlike RRSPs or even IPPs, PPPs offer a more customizable and tax-efficient way to build retirement wealth—making them particularly attractive for doctors who’ve already reached the limits of their RRSP contributions or are seeking more corporate tax-saving opportunities.
The Benefits of PPPs for Incorporated Physicians
As financial landscapes evolve, PPPs stand out with several compelling advantages:
Higher & Flexible Contribution Limits
PPPs allow higher tax-deductible contributions compared to RRSPs—and even IPPs—especially as you age. Contributions can include defined benefit components, additional voluntary contributions (AVCs), which are typically used to catch up on missed or underfunded contributions from prior years. Unlike RRSPs, AVCs cannot be made in excess of the scheduled amounts; they are strictly used to fulfill existing funding gaps, and even corporate surplus transfers.
Dual Benefit: Corporate and Personal Tax Savings
PPPs are funded through your medical corporation, meaning the contributions are corporate tax-deductible. This structure supports both long-term retirement planning and immediate tax reduction strategies for your practice.
Investment Flexibility and Growth
Unlike IPPs, which may be more rigid, PPPs offer more flexibility in how the assets are invested—giving you greater control and potentially higher returns over time.
Creditor Protection
PPP assets are protected from creditors, offering an added layer of security for physicians who may face legal or financial liability risks in their practice.
Multi-Layer Retirement Strategy
- PPPs offer multiple layers of contributions (including catch-up and terminal funding), helping you maximize your retirement income through various life and career stages.
Comparing PPPs, IPPs, and RRSPs: A Smarter Retirement Strategy
While RRSPs and IPPs can still be part of a broader strategy, PPPs often emerge as the most versatile option for high-income, incorporated physicians:
Is a PPP Right for You? Consider the Following:
You may benefit from a PPP if you:
- Are over 40 and earning a high income through your medical corporation
- Want to contribute more than RRSP or IPP limits allow
- Are looking for a hybrid plan that provides both predictability and investment flexibility
- Want to maximize corporate tax deductions while building personal wealth
- Need strong creditor protection for your retirement assets
How MedTax Supports Your PPP Journey
At MedTax, we specialize in supporting physicians and incorporated professionals with tax-smart retirement strategies tailored to your unique situation.
Personalized Strategy
We analyze your financial and corporate structure to determine how a PPP can align with your long-term retirement and tax planning goals.
Full Setup & Administration
While MedTax handles all administrative aspects of your PPP, we do not manage the actuarial requirements. An external actuarial professional must be hired for those services. MedTax’s role is to assist you from a tax planning perspective—to help evaluate whether a PPP is appropriate and beneficial for your situation. Although MedTax does not directly establish the plan, our partners at ILM may be able to help facilitate the setup.
Ongoing Optimization
As your income, career, or tax laws change, MedTax continuously evaluates your PPP to ensure it’s working in your best interest over time.
Build the Retirement You Deserve
A Personal Pension Plan could be a transformative tool in securing a comfortable, well-planned retirement. You’ve dedicated your life to caring for others—now let us help care for your financial future.
Book a free 15-minute consultation with MedTax today to learn how a PPP can elevate your retirement strategy.
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