In this episode of Money Scope, Benjamin Felix and I build on the main pension episode by using cases to illustrate when an Individual Pension Plan (IPP) or a Multi-Employer Pension Plan (MEPP), such as HOOPP, could make sense. It is not always a slam dunk. There are cases when they do not make sense.
Financial planner Aravind Sithamparapillai joins us for the second half to dig into HOOPP. It is a complex pension, and he did some serious legwork and modelling. We use those details and run some cases to show how HOOPP could fit into a comprehensive retirement plan that also uses a TFSA and corporation. The results are not always intuitive and may surprise you! I know they surprised me.
Case 1: Very High Income & Net Worth Decides Against IPP
Case 2: Double Doc Couple: One Uses IPP & One Does Not
Case 3: Moderate Income Doc Opts for an IPP
Case 4: When HOOPP Is Attractive & Optimizing Strategy
Case 5: Should a DIY Investor Use HOOPP or Take a Pass?
“When you are in a position to consider whether you want to save even more for the future, and you’re considering even more complex strategies to do so, like an IPP for that, I mean, it’s important to remember that this is actually a decision opportunity for you to consider whether you want to spend more of that money now instead. “
@LoonieDoctor
“Interesting to see how two corporations from two spouses who are in overall similar situations, one ends up with an IPP making sense and one ends up we’re focusing on bleeding out those RD2H accounts make sense.”
@benjaminwfelix
“Aravind recently had the highest score in Canada on a CFP exam, which surprised exactly no one, I think.”
@LoonieDoctor
“And then another benefit of a group pension is it allows you to pool your sequence and longevity risks with other members of the group. So it mitigates some risk, which are types of risks that are really hard to hedge on your own. ”
@benjaminwfelix
“People are going to wonder what I do with none of my spare time ”
@AravindSitham
