You could take extra profit out each year and invest it personally. Or leave it invested in the corporation for later. The comparison below funds the same lifestyle through both routes, then looks at what remains for retirement and family.
Leaving extra money in the corporation builds about $14.55m across the accounts. Paying it out each working year builds about $9.90m. Both amounts still have tax to allow for.
Retain: $14.55m
Distribute: $9.90m
$2.21m
more after estimated withdrawal taxes
After estimated tax on selling investments and taking money out, leaving it in the corporation produces about $10.32m, versus $8.12m. The gap comes from tax timing and years of investment growth.
Retain: $10.32m
Distribute: $8.12m
$1.07m
less in the estate estimate
After estimated tax at death, leaving money in the corporation produces about $6.79m for the family, versus $7.85m. This leaves out special planning that may reduce tax at death. Saving money and passing it on need to work together.
Retain: $6.79m
Distribute: $7.85m
This BC example: age 40 to 90, $500k initial annual profit, $90k spending, same salary, CPP and 60/40 investments. Values at 90 in 2026 dollars, before planning fees. Tax reserves are estimates; the estate view excludes specialized relief.
Starting age
40
Annual business profit
$500k before owner pay
Personal spending
$90k / year
Timeline
Age 40 to 90
One owner. Two routes.
Follow the money through the years.
The same profits, starting assets, spending, salary, CPP and retirement age. Every account uses the same 60/40 investment mix and assumed return. Both routes fund the lifestyle.
Path A
Take extra money out and invest personally
Pay the same salary and save the same amounts in the RRSP and TFSA. Each working year, pay out the remaining business cash and invest it personally.
Path B
Leave extra money in the corporation
Pay the same salary and save the same amounts in the RRSP and TFSA. Keep the extra business cash invested in the corporation.
See what could be left before tax, after taking the money out or after death. These are estimates, not guarantees.
Path A$8,116,748
Take extra money out and invest personally
Path B$10,322,737
Leave extra money in the corporation
Difference at age 90$2,205,989
At age 90, retaining surplus leaves about $2.21m more after estimated withdrawal taxes, but about $1.07m less in the estate estimate without specialized relief.
BC projection, starting in 2026. Both paths fund the stated lifestyle. All amounts are CAD in 2026 purchasing power, before planning fees. These are separate examples, not results to add together.
Read the values after withdrawal tax as a table
Estimated values after withdrawal tax, in 2026 dollars
Projection age
Path A
Path B
Age 65
$6,250,051
$7,002,870
Age 90
$8,116,748
$10,322,737
Why the paths separate
Tax timing changes how much stays invested.
More stays invested sooner.
Leaving extra money in the corporation delays the personal tax on taking it out. That leaves more money invested while the owner is working.
Count the eventual withdrawal.
The comparison estimates tax when the owner takes the money out. The $2.21m gap is what remains after that estimate. It includes years of growth as returns earn further returns.
Plan the estate as well.
Using the money yourself and leaving it to family can lead to different tax bills. Plan for both when deciding where to save.
Using the money and leaving it behind are different plans.
At age 90, retention produces about $2.21m more in the estimate after withdrawal taxes, but about $1.07m less in the estate estimate without specialized relief. Those are different outcomes, not figures to add together. An estate review can change the comparison.
How we built this example, and what it leaves out
An established BC owner starts at 40 with $400,000 in corporate investments, $200,000 in an RRSP, $100,000 in a TFSA and $50,000 in personal non-registered investments. Initial annual business profit is $500,000 before owner pay; spending is $90,000. Retirement is at 65. Profits, salary and spending follow the model’s indexation assumptions. The distribution route pays out available operating surplus after salary, employer CPP and corporate tax; the retained route leaves surplus for later. Neither is an optimized schedule. Figures are in 2026 purchasing power; planning and implementation fees are excluded.
Both paths use a 4.83% total annual return in every account, after assumed investment fees and before account tax/withholding, with the same 60/40 exposure. Inflation is 2.1%. Investment distributions, corporate tax and personal tax are included in the annual model.
Changing total annual returns by one percentage point in either direction puts the after-tax living-value difference at age 90 between $1,234,687 and $3,781,823, measured as Path B minus Path A. These checks show what happens under two different return assumptions. They do not show the full range of possible outcomes or how likely each is.
The amount after withdrawal tax assumes you sell the investments and take all the money out at the chosen age. It sets aside estimated tax on corporate dividends. It does not find the best way to spread withdrawals over retirement. The estate estimate also sets aside tax due at the owner’s death. It leaves out tax deferrals for transfers to a spouse and special planning that may reduce tax after death. Future tax rules, returns, fees and your own situation can change the result.
Examples calculated with Senova’s lifetime planning model on September 29, 2026. They compare possible choices. They are not client results, guaranteed savings or a claim that either plan is the best possible choice.
You don’t need to know which tax strategy to ask for. Tell us what’s changing in your business or life. We’ll agree on the work and fee before we start.