By John J. Moakler Jr. BMath, CFP, CLU, CSC
President and Senior Executive Financial Planner
Moakler Wealth Management Inc.


Doctors, in retirement, there are three portions to your paycheque:

 

1.The taxable portion: if you are still working at least part-time in retirement.

2.The tax-preferred portion: if you are incorporated, and still working – or even retired – you can turn your corporation into an investment company, and pay yourself a tax-preferred dividend in retirement.

3.The tax-free portion, by using a pension plan like an IRP – an Insured Retirement Program. In this strategy, your corporation buys a whole life insurance policy, which has been paying a dividend – wait for it – since 1877. The average dividend, right now, is 6.2%, and the growth is all tax-sheltered. Assuming your corporate tax rate on passive income is 50%, to compete with this dividend, you’d have to find another investment that guarantees double that. More than 12%!

And there is another thing that makes this strategy so attractive: whole life insurance builds a cash value inside the policy that we can access, in retirement, on a completely tax-free basis.

But: you want to start early, because in order for this strategy to work, you have to be paying into the insurance policy for at least 10 years.

Want to learn more or get started? Reach out to me anytime.

John J. Moakler Jr.  BMath, CFP, CLU, CSC
President and Senior Executive Financial Planner
Moakler Wealth Management Inc.

john@moaklerwealthmanagement.com
1 416 840 8544