How One Business Owner Secured $50K a Year in Tax-Efficient Retirement Income After a Health Crisis

Presented by Gregory Rozdeba, Co-Founder & CEO, Dundas Wealth. Client details are anonymized.

The Situation

A successful business owner in his early 50s had been running his incorporated professional practice for over 15 years. He had significant retained earnings inside his corporation, a growing investment portfolio, and was starting to think about retirement income planning.

Then a sudden health scare changed everything. A diagnosis that could have disqualified him from coverage entirely forced an urgent conversation about protecting his business, his family, and his retirement — all at once.

The Problem

The business owner was facing a perfect storm of interconnected risks:

• No corporate insurance in place — his family would inherit a massive tax bill at death with no funding mechanism
• Retirement income entirely dependent on the corporation — withdrawals would be taxed heavily, and market volatility added uncertainty
• A health event that was closing the window for qualifying for permanent life insurance at a reasonable cost
• No succession plan — if he became permanently disabled, the business value would collapse

His CPA understood the tax implications but didn't have the tools to implement a solution. His financial advisor was focused on portfolio management, not insurance-based corporate strategies. The gap between them was leaving his family exposed.

What Was Put in Place: The "Triple Play"

We implemented a coordinated three-part strategy — what we call the "Triple Play" — designed to solve all three problems simultaneously:

• Corporate-owned permanent life insurance — structured inside a holding company to create a tax-free death benefit, fund the estate, and generate retirement income through policy loans
• Family trust integration — to protect assets from creditors, enable income splitting, and ensure wealth transfers to the next generation with minimal tax
• Holding company structure — to separate active business risk from investment assets, shelter passive income from the SBD clawback, and provide a clean succession path

We moved quickly given his health situation. The application was submitted within two weeks, and the policy was approved with a rating that — had we waited another quarter — likely would not have been available.

Where It Left Him

The business owner now has a fully integrated strategy that:

• Generates $50K+ per year in tax-efficient retirement income through loans against the policy, not taxable withdrawals
• Provides a tax-free death benefit that reaches his family through the capital dividend account and funds the estate without forcing a sale of the business
• Keeps business and investment assets held in a holding company, separate from business risk
• Includes a family trust that enables income splitting and multi-generational wealth transfer

This is the kind of strategy that sits in the gap between your CPA, your investment advisor, and your insurance needs. Most professionals only address one piece. Dundas Wealth coordinates all three.

Important Context and Limitations

• This is one client's case with identifying details removed. It is not a typical or promised result.
• What's possible for you depends on your age, health, corporate structure, cash flow and how long the money can stay in the policy.
• Policy values are projections. Dividends on a participating policy are not guaranteed.
• The amount that can be paid out tax-free through the capital dividend account is the death benefit less the policy's adjusted cost basis.
• Loans against a policy accrue interest and reduce the death benefit. Loan terms are set by the lender and can change.
• The strategy relies on current tax rules, which can change. It should be reviewed with your accountant before anything is put in place.