In Group RRSPs or group registered retirement savings plans, each person gets an RRSP. These individual RRSPs are clubbed together in a single contract with the RRSP issuing company. Employees choose the amount they wish to contribute which is then deducted from payroll and deposited into their RRSP. Majdoub Financial Planners, Ottawa advise you to build a significant nest egg through a group registered retirement savings plan. This money will help you lead a financially independent and worry-free life later.
WHAT IS IN IT FOR EMPLOYEES
- It is a great way to set aside a sizeable fund to ensure financial security post-retirement.
- The contributions to group RRSP are deducted from your pre-tax pay. This instantly brings your tax burden down. It is a great tax relief tool, says Meiz Majdoub of Majdoub Financial Planning Group at Ontario.
- Taxes get deferred until you withdraw.
- Group RRSP has a low cost and the minimum contribution is only $25.
- A payroll deduction makes it easy to save along with the option of a top-up contribution. It is easier than making a large contribution annually.
- Some plans let you contribute on behalf of your husband or wife
WHAT IS IN IT FOR EMPLOYERS
- Simple to implement
- Less regulated than pension plan
- If your business enjoys a strong and stable cash flow, get a group RRSP and be seen as a responsible, committed employer, say RRSP experts at Majdoub Group, Ottawa. It can even add weight to your offer at the time of hiring talent.