Tax planning options exist to enhance your retirement plans
Tax strategies such as flowthrough shares — which can come in two forms. Flow-through shares are aimed at helping to lower the tax bill for those who have incomes in a top tax bracket.
The first form is better known. In this case you invest say $50,000 into a flow-through, you can get significant tax savings through a variety of investment credits. The risk is that you must invest these funds in highly volatile companies that are usually doing mining exploration.
The second form is less well known, and is more conservative. It essentially takes away the investment risk, leaves you with a tax savings that is potentially smaller, but is guaranteed from Day 1.
Other strategies for high-income business owners, incorporated professionals and occasionally for key executives of a corporation would include strategies called Individual Pension Plans (IPP) and/or Retirement Compensation Arrangements (RCA). These strategies are too complicated to address in detail here, but serve as tools to provide additional pension income to those who are restricted by the RRSP contribution limits currently in place.
W hile R RSP contribution limits do impose some retirement planning challenges for those with a high income, a variety of good tax planning exists to provide some alternatives that might be even better than simply having more money going into your RRSP.