If you’re part of the older generation of working Canadian adults, you probably have a tidy sum of money set away in your retirement account. But for those who are new to the workforce, retirement is a distant future full of confusing terminology and percentages. Too often, it’s an investment that’s avoided by younger adults. Fortunately, retirement doesn’t have to be confusing or complicated. Take a look at group RRSP in Toronto and untangle some of the confusion.
A Registered Retirement Saving Plan is, essentially, an account for employees to contribute to. Employers can contribute to the plans too. The RRSP is set up through your employer, and you as an employee have the option to contribute a percentage or specific dollar amount to the account. Depending on what kind of plan your company chooses, your employer may match your contribution or add a company-sponsored rate to the account.
The contributions are made through payroll deduction. Because of this, all of the money that goes into the directly into the RRSP account through payroll, is not considered taxable as income. The money remains tax-free until funds are drawn from it. With the ease of payroll deduction, employees don’t have to think about their contributions and the money is rarely missed; the amount is automatically deposited in the account, and easily grows over time without a lot of thought put into the management of the account.
Once the RRAP contribution is made, employees are free to invest the earnings into options they choose. The good news is most companies have some options for assistance with group RRSPs. With the right support and advice, investing your retirement savings is a simple process that requires little investment of your time. With your investment advisor you can make changes fairly easily, including making your investments riskier or you can change it so that there is less risk involved too.
