How to draw money out of your corporation in retirement Nov 7th

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How to draw money out of your corporation in retirement

– moneysense.ca

Incorporated business owners can sometimes be unsure of how best to decumulate, drawing from their corporate savings along with their other investments and pensions. Corporate savings do provide complexity as well as opportunity.

From paying yourself a salary to drawing income

Business owners typically pay themselves a salary during their working years. A salary is deducted from corporate business income, reducing corporate tax payable on that income. And that salary is then taxed personally. When a business owner retires, they typically have no more business income earned by their corporation. They may have cash or investments in their corporation or they saved with a separate investment holding company that generates investment income.

Retired business owners sometimes continue to pay themselves a salary, though they probably shouldn’t take a paycheque at this point. Salary can be deducted against business income but it may not be reasonable to deduct from a corporation’s investment income…

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