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How to draw money out of your corporation in retirement
– moneysense.ca
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…
