SOHO Group Retirement Savings Program For Small Business Owners And Their Employees
Many small business owners plan to fund their retirement through the eventual sale of their businesses. This has risks as you may not receive as much money for your business as you need to fund the retirement you want.
Group RRSPs are an easy way for small business owners to build retirement savings and provide some benefit for the company too. Included as a part of a total compensation package, group RRSPs add appeal for prospective employees. They may also help control payroll costs when re-assessing the overall salary picture.
Business owners can establish group RRSPs that in turn benefit themselves as employees. Group RRSPs are employer-sponsored retirement savings plans wherein the company makes contributions to an RRSP on the employee’s behalf within individual contribution limits. Contributions are deductible by the company and reportable as earned income by the employee, who then receives a tax deduction for the contribution. Group RRSPs are creditor-proof, providing additional security for the owner should something catastrophic happen to the business.