Do the math
For a more precise and detailed simulation, you can complete the Investor Profile form which can be found in the Useful Documents section.
set by the CRA
- Salary increase: 5.5%
- Rate of return: 7.5%
- Payment indexing after retirement: 3%
The IPP gives you access to higher retirement income.
By switching from an RRSP to an IPP:
- You’ll shift from a defined contribution (DC) plan to a defined benefit (DB) plan, which guarantees you a set retirement income
- You’ll enjoy a higher contribution limit, meaning you can build more retirement savings
- All of your contributions are tax-sheltered, just like in an RRSP
- The investment risk is assumed by the employer, whereas in an RRSP, the plan member assumes the risk
- Social contributions are not applicable to contributions made to an IPP.
Although the IPP and the RRSP are two very different products, those who are eligible for the IPP might tend to think of it as an upgraded RRSP. However, when we take a closer look at the features of these two plans, the differences become clear and we can see how an IPP can offer members a higher retirement income.