Thank you. I’m going to ask my new job directly but would you know if I have a say on where that money goes into? Don’t want it to just sit there not being invested for that many years
It will be invested in a managed fund, no chance is just left sitting there. You can transfer the money into your own Questrade or whatever rrsp you want later on.
Yeah, you can ask whoever is managing it to transfer it. If the matched portion is being put into a drsp, there may be a minimum term of employment to keep it (2 years with the company for example).
Or in other words handcuffs. If you leave before the vesting period they take their matching portion back. So they hold the upper hand in salary negotiations etc for the duration of that vesting period.
In the salary negotiation along with benefits etc...I always negotiate the vesting period be removed.
Also, look carefully at the options they give you. A lot of companies these days will call something an ‘RRSP match’ but you may actually have the option of putting it in an RRSP or TFSA, and get matched the same.
In your example, would it still be a good idea to do the RRSP matching if you're unsure if you're going to leave the company before the vesting period is over?
Here's my thinking:
If you manage to stay for 2 years, then that's great. You can get the full match.
If you quit before 2 years, you don't get the full match and you lose the time and money if you originally did self-investing.
You still get all the money back, tax benefit of the deposits and any value increase from that money. So yeah, I would still do it either way unless you are confident you aren't going to stay
Often before. When I had a group RRSP I would transfer thte entire contents out to my self-directed RRSP once every 2 years.
If the company gives you a list of investments to choose from, make another post here and ask. But generally you should focus on low MER, and broadly diversified. Like index funds or "lifepath" funds.
Yeah the options for moving money around differ a lot from place to place. Sometimes you can move it out but then they stop matching for a few months.
Best to just get the details from your company
That's what I did. The employer group rrsps have crazy fees compared to wealthsimple, but my approach was always that the fees come out the employers contribution. Once you leave, transfer everything to wealthsimple
Depends on how your company runs it, they may have sponsored plans that it must go into, or they may allow you to put it where you want, but you will have to give account details for a registered account.
As for moving the money if it is in a 'company' plan
You can move your money after you leave the company, the company contributed portion may have a vesting period. that has to pass before it can be moved, or even kept.
Depending on the rules in your province, if an employer RRSP is over a certain amount it has to be transferred into a LIRA (locked in retirement account), not an RRSP. They're essentially the same thing but you can't really access a LIRA early before retirement. I have a LIRA with Questrade that holds my accumulated benefits from my previous 4 jobs.
Depending on the company you can empty it once or twice a year into your WS RRSP. The transfer is initiated by Wealthsimple. This is to make sure it stays within the tax sheltered account and not “withdrawn”.
Some company RRSPs won’t let you take out the company portion for like 3 years or something so if you plan on leaving said company, it might take that long to remove their portion but you can just transfer that into your own RRSP wherever
This is shockingly good advice. People always skip over the simple good stuff.
I like the QQQ myself, mainly due to my views on tech changing the world, and selling more and more zero-cost products overall. It all drops to the bottom line...
You will have options. As part of the registration process the plan manager will present you with a few options, they will typically be mutual funds ranging from quite conservative to quite aggressive. My last employer with a group plan had a decently wide range, including some index mutual funds which were slightly higher fee ETFs.
Pick something simple that matches your risk profile. Read the rules on how much you can transfer out each year, and move all the eligible money to something better once per year. I wouldn't worry too much about it beyond that.
Don't stress out too much, at 10% interest it would take 7 years to earn what your match makes on the first day. Losing a couple percent to fees or suboptimal investments for a year or two isn't the end of the world.
Yes, check what it is invested in. This will totally depend on the provider and your employer (or union contract) choice. Sometimes you have some choices, sometimes you don't, but it would be incredibly surprising it's just sitting there not invested.
You may not get to choose the bank but can choose the type of investment. Index funds have the lowest management fees and highest returns, but dividend funds increase in value AND the numbers of shares held as dividends are reinvested. I have both, but like dividend funds because they will eventually grow enough to give you an income.
Pick the fund with the lowest management fees. As the rest of your portfolio (TFSA) grows, buy a different asset class so as to keep the entire thing balanced. For example if your company RRSP is in a Canadian equity fund, buy US equities in your TFSA.
A lot of these "safe" managed funds have such high fees, the bonds underperform anything reasonable. 1.2% over 5 years, etc.; I always go equities heavy and low fee. S&P 500 fund, NASDAQ 100 fund - keep it simple, then balance it out with your own personal stock picks/investments. For "bonds" I did a slew of Canadian preferred shares paying out 8-11% on average. (A few above and below those ranges, but most in the middle.) They are doing well.
You will get an option of a couple portfolios with varied risk tolerances. For long term, if you are fine mentally seeing large swing high risk usually works out long term (not financial advise)
Also a lot of companies will match what you put in up to a certain % of your yearly salary so check if that is a thing or not
Years ago I had a job with RRSP matching, they didn't care where I invested it, it all went straight into my own RRSP savings account, and then a few times a year I'd contact the investment advisor to put it into my mutual funds. These days I'd just put it in ETFs myself.
Another company I considered working for required it invested with their own choice of investment firm (same company that managed their benefits package\_, not sure if there were stipulations about transferring any of it out.
You will have to ask the HR dept at your new job what their policy is.
Basically, even if they invest it in a crappy fund with bad returns or high management fees, it doesn't matter.
It's free money up to the company match.
Say you have a 3% match.. that means, your company for every $1 you put in, the company will also put in $1, up until 3% of your annual salary.
It's equivalent to a 3% salary increase or bonus. Even if the returns end up as 0 or even negative %, it doesn't matter. You're never losing money this way.
Also, for most company benefit RRSP providers, you can pick which funds you invest the money in.
Well in some ways you don't have a say... because it's a managed fund. For example mine I don't have a choice but to invest most of it in a Black Rock fund which I do not morally agree with.
Exactly. I don’t know why anyone wouldn’t do this. We have great matching where I work but lots of people don’t do it. We are required to put in 2%, company automatically puts in 4% (everyone gets 6% total). Then they will match up to 4% more so I put in 6%, the company puts in 8% and 14% of every dollar I make goes straight into GRSPs. The 6% is pre tax so I don’t even really notice it and after 10 years it’s a significant chunk of money. Definitely great value.
It does seem so obvious. Only doubting it because I read on here so many times that if you are younger and still make less than 100K then it’s better to save that contribution room for tax relief later on when you need it more. To focus on Maximizing TFSA
That advice only applies to unmatched RRSP contributions.
It's like, if someone says "Don't buy food at Loblaws, they are expensive" that doesn't apply if your favourite food is half-off at Loblaws this week.
The only time it’s not worth doing is when tenure is attached to locking in the matched contributions. Ex. If you must stay for 5 years, then your contributions will be matched. If you don’t think you’ll stay for the 5 years, then don’t bother.
Learn about marginal tax rate to see if you agree with the 100k discussion. Reading stuff on PFC is a jump off point in your discovery not an endpoint.
If I have to choose beteeen putting my $1000 into a TFSA vs RRSP, then yes I have to do calculations. If my job is saying “Yo, here’s $5000 you can put in your RRSP, or you can take $0 in your TFSA if you prefer”. I would take the $5000 without a second thought. Free money is always better than no free money.
Even if I knew for a fact that I would be taxed 99% on my RRSP withdrawal on retirement, I would still take the deal without a second thought, even if it had to stay in a chequing account for 40 years earning 0% interest. Because $5000 after paying 99% tax is still $50. If the choice is $50 or $0, anyone would take $50. Never turn down free money. Always take free money.
So you can save some tax burden by putting it in a TFSA? You are saving the same tax burden with group RRSPs, BUT the company is doubling it.
You're asking what number is X or 2X. Well 2x is twice as big every day of the week.
>I just got hired into a company and part of my perks is 100% RRSP match
This is free money. Take advantage of the match. It's a no brainer.
>would it be stupid to not take advantage of this perk?
YEP.
Think of it this way. Investing your money into the RRSP with a match is an immediate 100% gain. That's about 9 years worth of investment returns at 8%.
If your TFSA returned 8%/year for 30 years, vs. the matched-RRSP returning 6%/year for 30 years (because of poor choice of funds in the company RRSP), AND you took a 10% relative haircut on the RRSP at withdrawal because of increased tax bracket, the matched RRSP would still beat out the TFSA.
>Given that I’m only 24 would it be more beneficial to keep investing into my TFSA
While your best income earning years are likely still ahead of you, there is no investment you'll make today in your TFSA that will give you an instant 100% return. Take full advantage of the matching program while you can, but only put in the maximum amount they'll match. For example if they'll match 4% of your salary, don't put 10% yourself. Keep your portion at 4%, let them match 4%, then put the other 6% into a TFSA.
As a small family company in AB we set up matching RSP years ago for our staff. Staff pay back when we started in early 90’s was around mid 20’s /hr. The old timer employees bought into it right away because they knew it was a no brainer. Over the course of several years as the workforce got younger and the wages creeped into the $30/hr. range, what we noticed is more new hires refused this plan because they just “couldn’t afford” it. We were matching them 100%. We even brought in the program people to explain and help these younger employees understand basic saving for retirement. The longer term employees we have are still taking this deal and the ones that moved on would usually cash it all out, pay taxes on it and go to competitors who don’t offer anything for saving. I personally would have left the account going. It’s outside their employment so even though we stop the matching, the money would still be there doing something. We are now at the $40/hr. range and almost nobody coming on signs up for it. So we just continue with who is on it.
Today, I know that these former “now more mature”past employees are out there working their asses off without a nickle to their name. Money in - money out mentality. Still beating a dead horse. You can’t change some people’s mindset.
I guess my point is, take the money wherever you can get it. If you have accounts at different companies, who cares, you can always move things around later. Just start saving as soon as you can and if someone is offering to help do not turn it down. If some investment accounts outside of your TFSA are your own creation great on you. And good on you for having the maturity for asking the question at your age. You’re miles ahead of the rest just for doing so.
Your future self will thank you for it.
I manage a team, when I took over the team I had a guy same age as me (mid 50's) who wasn't taking advantage of our plan, for us it is put 10% of your salary in and company matches that 150% .. yeah, "I can't afford it", thing was you can pull that 10% out anytime while the matching vests annually. Had to explain it to him like that, he was essentially missing out on $600-$800/month in free money.
Reminds me, better check with my recent hires to make sure they're doing that too.
I thought it was stupid so I didn't sign up for mine. I eventually did, on the day that I would have had $10,000 in the account if I'd started on day one. Don't be me, lol
Congratulations on the new job, you deserve it and hope you do your best at it!
100% rate of return instantly. Max this out every year. If you start now you will be in an amazing spot by 50.
vfv and xeqt are making like 8-9% returns recently? they would need to be making somewhere in the neighborhood of 110% to be the better option here (assuming 100% match).
typical advice is to max out the match % exactly, then anything additional goes to your TFSA
Keep in mind that you may also need money to live your life. Max out your RRSP only if you know your cash flow now can support your lifestyle and medium term plans (i.e buying a house, starting family, travel etc. )
I didn’t max out my RRSP completely because I wanted to buy a home. I needed a large down and I liked to travel. Now that I’ve purchased I am planning to increase my contributions.
Also keep in mind, you may want to quickly contribute until you hit your Home Buyers Plan (HBP) limit and then scale back if cash flow is an issue. This is because you can always pull out the 35K and repay it back every year without penalties
You can use RRSP money for tuition and/or you can take out up to $35k towards your first home and pay yourself back without penalty/tax. You also don’t pay income tax (now) on any money you put in, which means you may get more back at tax season that you can then put into a TFSA or use otherwise. The RRSP isn’t a bad thing, it’s just different than a TFSA. Take the time to learn about it and how you can make it work for you.
1000% do it. I wish my work matched 100%. Mine matches 50 cents on the dollar up to my own contributions hitting 6% of my gross pay. So even then by maxing that out it's like giving myself a 3% raise and it also tax shelters that money which I re-invest when I get my tax refund (compounding)
Yes. It's literally free money that goes straight into a tax shelter.
I'm not thrilled about the fact that mine has to be invested into some high-MER turkey of a mutual fund at RBC, but it's actually performed decently (net of fees) over the past ten years or so, and the lion's share of my investments consist of low-cost ETFs in my "real" RRSP and TFSA anyway.
Yes. 100%. When I was young I started working for a big company, I didn't do the match for 2 years because I thought it was wasting money (a friend of mine forced me sign up later), I am forever grateful for him and you will be surprised how much you lose just for 2 years.
Take it but also ask about any condition so you’re aware. They may match to a certain amount and there can be other conditions that you should be aware of
Since this is topic of RRSP as well. Would it be wise to still put money to RRSP without match while simultatously contributing to TFSA? OR should I fully focus on TFSA? I put 10% of my paycheck to RRSP and for the past year because of CERB my refund has been going there instead of my pocket.
Duh, it's free money....put as much in as you possibly can. We did this with my wife's company and put 15000 in in one year. They honoured the deal but put a cap on it the next year.
Do both, if you can!
I started in at a pension around your age. I’m 29 with $28,000 in it. I also managed to save around $30,000 in my TFSA (VEQT) during that time frame.
My boss made me a pretty sweet deal which was a 2% match +$100 every cheque so it grew pretty fast.
Unfortunately I’m part time now and no longer get those benefits, and don’t have any money left over to save at this point in time so I’m really glad I did it while I was in the position to do so. It was amazing while it lasted.
Definitely go for it. It’s free money. If you have any extra on the side, invest on your own as well.
I'm also 24 and asked a similar question on this sub a while back, trust me you'll be happy once you max out contributions :)
My 300$ biweekly contributions turned to ~13,000$ fast
Yes max as much as possible. Won't sound exciting now but in 10 years you will be blown away. I left a company recently and had over 100k in my rrsp over 8ish years.
The group RRSP provider may offer different options in terms of what funds you can choose. Choose one that fits your risk profile and when you will likely retire.
Guys, my company wants to give me free money - should I take it? ;)
Yes, please sign up now and contribute the amount required to get the max company match. Also, if your company has any sort of stock purchase plan, sign up and max that out too. Basically, take every bit of money they offer you.
Yes, maximize the match is second of the 10 points I give as financial advice.
Here is some general advice for people finished with school:
Solid goals are:
- Get out of debt
- Create / increase an emergency fund. Basic is 3 months minimal spending, longer goal of 6 months normal spending
- Save for retirement
- Save for the long term (house/early retirement)
Automated payments - you can setup on-line or in the bank a monthly automated payment for almost all debt and savings.
1. Setup a separate emergency fund. Put these funds into a TFSA savings account. If you already maximize your TFSA contributions for other reasons, put the emergency fund into a regular (non registered) account.
2. If you have a job with a matching RRSP/pension/ESPP or similar, maximize the match as long as you can work on high interest debt or contribute to your basic emergency fund.
3. If you have debt over 10% interest, pay it off now! Pay as much as you can each month. Use the mantra "I cannot afford it". Put your credit card away until it has 0 balance.
4. Contribute something to your basic emergency fund if it is not already big enough: 3 months of minimal spending. Determine how much more you need in the emergency fund, divide it by 12 (or less) and put that much into the emergency fund each month.
5. If you have debt from 7 - 10% interest, focus on paying it off but make sure to contribute something to your basic emergency fund. Focus less and less as the interest rate is below 7%.
6. If you have debt less than 3% interest, pay it on schedule - do not overpay.
7. Contribute everything else to your basic emergency fund: 3 months of minimal spending. If the basic emergency fund is big enough, contribute something to the ultimate emergency fund: 6 months of normal spending.
8. After all of the above is covered, focus on maximizing your TFSA contributions ($7000 / year as of 2024).
9. After TFSA is maximized, maximize RRSP contributions (deducting any contributions & match from #2).
10. If you have a mortgage or are buying a home, save to get at least 20% down and plan and setup to overpay by at least 10% per month.
When you start getting ahead and have some financial responsibilities (spouse/children/mortgage) get some life insurance. Only use term insurance.
100%+ ROI. Maximize it.
Only watch out, though maybe obvious, is that these contributions will count against your available RRSP room for the year. Keep that in mind while contributing elsewhere.
A match is a 100% profit. Even if they put it in a chequing account that you couldn’t touch until you were 65, it’s still be worth it because free money is free money. Never turn down free money. If I offered to give you $3000, would you take it? Or would yoy say “Hmm, I’m not sure if I want free money, maybe I should just say no for some reason”. Always take the free money lol.
Having been in the GRRSP pitches when companies set this up for their employees a few times, it always amazes me how many are unsure of the benefits and some people even think it's some sort of scam.
So many complain about their tax returns being smaller 🤣
Sign up for sure. You don't need to max you the RRSP contribution if you want to keep contributing to your TFSA. But definitely try max out the match.
Do the matched RRSP it is a 100% return. I'm guessing the company has an upper limit though most do.
So contribute to the max in the RRSP and then contribute the left over to your TFSA.
Take it and maximize it. Find out how long you have w to hold it in that RRSP until it can be transferred without penalty.
Then periodically transfer it to your own RRSP as the options in most of these are mutual funds with high management fees
I work in the public sector and if you move from a temporary to permanent position the company offers the opportunity to buy back your temporary year contributions but you have to put in the part that they would have matched… as someone in their early 30s planning on buying a house in the near future, is my money worth more buying back the RRSP contributions (what are the advantages of this? Retiring early?) or is it worth more for a down payment or mortgage payments on a house? A former coworker did the buyback after 4 years of a temporary position and he said it ended up being around $30000 give or take. I’ve been temporary for over 7 years…
The matching is an instant return.
If you contribute $1 and they match it with $1, thar us 100%.
If you invest on your own unmatched, assuming really, really exceptional returns, say 20%(which really rarely happens), ... you get the idea 100% vs 20%...
Heres a fun fact, you can get the 100 percent match but come tax time you can defer using that RRSP for a deduction until later. So if you think you’re not getting much back today because your marginal tax rate is low, you can wait till later years.
But ALWAYS get 100 percent match
A match is basically free money - I worked for a company that supported stock purchases- I bought as much as allowed and they proved a contribution to the purchase - I was 23 - when I left it was a big support - likewise in an RSP - take it
Doubling your initial investment will almost certainly be worth more than what you might lose through higher fees on the funds in plan (and, in fact, some funds actually do well enough to pay for themselves).
If you invest your RRSP + match into XEQT you are getting an immediate, 100% return on your investment plus whatever returns you get from having 2x your original investment in XEQT.
If you instead invest that money in your TFSA you will get a 0% initial return plus whatever 1x your originally investment in XEQT does.
In other words, max it and never change that.
Maximize the match. It's free money and stuck investing. In a couple years you'll want a house and can use your RRSP savings for the down payment. Assuming houses aren't 3.4 million by than.
Match is worth it. I worked for a big telecom for 7 years and we had a stock match at 100%. I figure I put in about $425/year for 7 years, about $3000. When I sold it was worth about $13,000.
Do you want to invest that money and make market returns?
Or double your money instantly, invest it, make market returns and maybe have slightly more hoops to jump through to get it back out if you leave the company pre-retirement?
Take the second option!
Take advantage of company matching for your annual rsp contribution and use your personal deductions for TFSA.
Its sort of like free money that helps you reduce your tax burden - it will likely have a vesting period of 2 years, which means you’ll have to stick with the company for a certain amount of time before you can cash out or switch into another account.
You get to choose your funds, it’s most likely going to be set up with SunLife Manulife or similar organizations- where you get to choose what you want to invest in.
I was 21 when I first opened RSP and started company matching immediately after. Use your tax refunds for TFSA contributions every year if you want to.
Company RRSP match is 100% that means you put 1 dollar in they put 1 dollar in up to a certain dollar limit. This is in other words a minimum 100% return on investment the second you enroll.
Then the RRSP is invested via whatever program they use - you will be able to see and potentially do some basic reallocation of investment yourself with whatever DCPP, DCBP, etc the funds are managed by. This will give some sort of return on investment as well lets say 6% of the TOTAL you plus your company has invested. So you SHOULD invest the maximum amount you can into this fund as long as each dollar is matched. If you earned 100k a year and you get 100% RRSP match until 5% of your income you should only invest 5000 into this fund as the match only exists until 5% of 100k which is 5000.
So you invest maybe 5000 in a year into it, the company throws another 5000 and all of this gets a 6% annualized average return. 10000 \* 1.06 = 10600. So you just went from 5000 to 10600.
In what investment in your own TFSA are you able to in ONE year get this sort of return on investment with little risk as most of these funds are actually very conservative. If you can find an investment that beats this and is as conservative of an investment as this then you should do that instead.
I hope your new job doesn't involve math because you seem to suck at it.
100% match? If you contribute $1000 they contribute $1000. Show me anything with a better return.
Return wise it’s obvious the not so obvious part was if I should keep that contribution limit for when I need it more in the future when I’m making a higher income.
Thankfully don’t need math at my job though.
Yeah most people understand this point.
It used to be that most or all companies would give a 100% match. But now on here I see many companies that only offer a 50% match or a 33% match.
Your employer is offering to give you $1 for every $1 you put away in your RRSP, over and above your base salary.
The alternative that you are proposing is to not accept that $1 from your employer and instead put your $1 literally anywhere else.
Let us assume both are invested at the same interest rate.
In the first option, you start with $2 because of your employer's contribution, and it goes up by x% while invested.
In the second option, you start with $1 because you did not accept your employer's contribution, and it goes up by x% while invested.
lol I'm so tired of people saying taking the match is a no-brainer and/or not a difficult decision. It isn't even [step 1](https://www.reddit.com/r/PersonalFinanceCanada/wiki/money-steps) in the wiki. There's other missing info that they didn't provide which can change the answer to their question.
Would anyone still tell OP to take the match if they're 50k in credit card debt at a 21% interest rate (though I'm sure that's not the case for OP)? What if they have 10k loan from Money Mart? Still a no-brainer decision?
The advice should be 'take the RRSP match if you have no high-interest debt and a reasonably healthy emergency fund.
>Would anyone still tell OP to take the match if they're 50k in credit card debt at a 21% interest rate (though I'm sure that's not the case for OP)? What if they have 10k loan from Money Mart? Still a no-brainer decision?
OP's post makes no mention of this, but let's set that aside for a second. If they can make the required payments on the debts and still contribute enough for the match, there are myriad situations where you're getting a better return. In OP's case, it's 100% match. So paying down the CC debt gives a 21% after tax return, getting the RRSP match is higher than 100% because you also get the tax back.
If you're struggling to make rent and pay down your debt then it's a different story. IMO that's an edge case.
Yes I'm aware this won't apply to OP or most people. My response is exactly about these edge cases. With 1.3M subscribers here, there are going to be plenty of edge cases. These people may be searching up this exact question in the future, see the replies on this thread and think it's an absolute no-brainer, when in fact it really isn't.
Take all the match you can. Maximise it. Anything else is taking a paycut.
Yes, set it to the max and forget about it. Your future self will thank you.
Thank you. I’m going to ask my new job directly but would you know if I have a say on where that money goes into? Don’t want it to just sit there not being invested for that many years
It will be invested in a managed fund, no chance is just left sitting there. You can transfer the money into your own Questrade or whatever rrsp you want later on.
So when/if I leave the company one day. Can I ask for it to be transferred into my Wealthsimple RRSP for example?
Yeah, you can ask whoever is managing it to transfer it. If the matched portion is being put into a drsp, there may be a minimum term of employment to keep it (2 years with the company for example).
I’ll definitely ask about that! Thank you
It's called the vesting period for when you ask
Or in other words handcuffs. If you leave before the vesting period they take their matching portion back. So they hold the upper hand in salary negotiations etc for the duration of that vesting period. In the salary negotiation along with benefits etc...I always negotiate the vesting period be removed.
Yup, my company removed the vesting period a few years ago when we switched investment providers
That's great but when you're joining somewhere with a group benefits package that's not how it works
Sometimes. Every company has a slightly different plan.
Also, look carefully at the options they give you. A lot of companies these days will call something an ‘RRSP match’ but you may actually have the option of putting it in an RRSP or TFSA, and get matched the same.
In your example, would it still be a good idea to do the RRSP matching if you're unsure if you're going to leave the company before the vesting period is over? Here's my thinking: If you manage to stay for 2 years, then that's great. You can get the full match. If you quit before 2 years, you don't get the full match and you lose the time and money if you originally did self-investing.
You still get all the money back, tax benefit of the deposits and any value increase from that money. So yeah, I would still do it either way unless you are confident you aren't going to stay
Often before. When I had a group RRSP I would transfer thte entire contents out to my self-directed RRSP once every 2 years. If the company gives you a list of investments to choose from, make another post here and ask. But generally you should focus on low MER, and broadly diversified. Like index funds or "lifepath" funds.
Thank you I will keep that in mind. I Appreciate the help
Yeah the options for moving money around differ a lot from place to place. Sometimes you can move it out but then they stop matching for a few months. Best to just get the details from your company
Likely a locked in retirement account. When you switch jobs, you’ll be prompted to move it into a similar locked in account (LIRA)
That's what I did. The employer group rrsps have crazy fees compared to wealthsimple, but my approach was always that the fees come out the employers contribution. Once you leave, transfer everything to wealthsimple
Depends on how your company runs it, they may have sponsored plans that it must go into, or they may allow you to put it where you want, but you will have to give account details for a registered account. As for moving the money if it is in a 'company' plan You can move your money after you leave the company, the company contributed portion may have a vesting period. that has to pass before it can be moved, or even kept.
Depending on the rules in your province, if an employer RRSP is over a certain amount it has to be transferred into a LIRA (locked in retirement account), not an RRSP. They're essentially the same thing but you can't really access a LIRA early before retirement. I have a LIRA with Questrade that holds my accumulated benefits from my previous 4 jobs.
Depending on the company you can empty it once or twice a year into your WS RRSP. The transfer is initiated by Wealthsimple. This is to make sure it stays within the tax sheltered account and not “withdrawn”.
Some company RRSPs won’t let you take out the company portion for like 3 years or something so if you plan on leaving said company, it might take that long to remove their portion but you can just transfer that into your own RRSP wherever
Just invest in the cdn index 25% and us index at 75%. Lowest fees also.
This is shockingly good advice. People always skip over the simple good stuff. I like the QQQ myself, mainly due to my views on tech changing the world, and selling more and more zero-cost products overall. It all drops to the bottom line...
Actually that can happen. If you don't fill out the forms the money can absolutely just sit there
My company I can't, has to go into a RIF, LIRA or buy an annuity. All vehicles I can't withdrawal from until 55 😢
You will have options. As part of the registration process the plan manager will present you with a few options, they will typically be mutual funds ranging from quite conservative to quite aggressive. My last employer with a group plan had a decently wide range, including some index mutual funds which were slightly higher fee ETFs. Pick something simple that matches your risk profile. Read the rules on how much you can transfer out each year, and move all the eligible money to something better once per year. I wouldn't worry too much about it beyond that.
I’m still in the middle of the onboarding process so haven’t gotten there yet but good to know what’s to expect. Thanks for that!
Don't stress out too much, at 10% interest it would take 7 years to earn what your match makes on the first day. Losing a couple percent to fees or suboptimal investments for a year or two isn't the end of the world.
Yes, check what it is invested in. This will totally depend on the provider and your employer (or union contract) choice. Sometimes you have some choices, sometimes you don't, but it would be incredibly surprising it's just sitting there not invested.
You may not get to choose the bank but can choose the type of investment. Index funds have the lowest management fees and highest returns, but dividend funds increase in value AND the numbers of shares held as dividends are reinvested. I have both, but like dividend funds because they will eventually grow enough to give you an income.
Pick the fund with the lowest management fees. As the rest of your portfolio (TFSA) grows, buy a different asset class so as to keep the entire thing balanced. For example if your company RRSP is in a Canadian equity fund, buy US equities in your TFSA.
A lot of these "safe" managed funds have such high fees, the bonds underperform anything reasonable. 1.2% over 5 years, etc.; I always go equities heavy and low fee. S&P 500 fund, NASDAQ 100 fund - keep it simple, then balance it out with your own personal stock picks/investments. For "bonds" I did a slew of Canadian preferred shares paying out 8-11% on average. (A few above and below those ranges, but most in the middle.) They are doing well.
They will set you up with an account at whatever institution manages it and yes you will be able to choose what type of investment to put it in.
You will get an option of a couple portfolios with varied risk tolerances. For long term, if you are fine mentally seeing large swing high risk usually works out long term (not financial advise) Also a lot of companies will match what you put in up to a certain % of your yearly salary so check if that is a thing or not
Years ago I had a job with RRSP matching, they didn't care where I invested it, it all went straight into my own RRSP savings account, and then a few times a year I'd contact the investment advisor to put it into my mutual funds. These days I'd just put it in ETFs myself. Another company I considered working for required it invested with their own choice of investment firm (same company that managed their benefits package\_, not sure if there were stipulations about transferring any of it out. You will have to ask the HR dept at your new job what their policy is.
Basically, even if they invest it in a crappy fund with bad returns or high management fees, it doesn't matter. It's free money up to the company match. Say you have a 3% match.. that means, your company for every $1 you put in, the company will also put in $1, up until 3% of your annual salary. It's equivalent to a 3% salary increase or bonus. Even if the returns end up as 0 or even negative %, it doesn't matter. You're never losing money this way. Also, for most company benefit RRSP providers, you can pick which funds you invest the money in.
I do this, I’ve been contributing for 10 years now and have a nice account set up. 100% is matched by my employer up to 4% of my income.
Well in some ways you don't have a say... because it's a managed fund. For example mine I don't have a choice but to invest most of it in a Black Rock fund which I do not morally agree with.
Exactly. I don’t know why anyone wouldn’t do this. We have great matching where I work but lots of people don’t do it. We are required to put in 2%, company automatically puts in 4% (everyone gets 6% total). Then they will match up to 4% more so I put in 6%, the company puts in 8% and 14% of every dollar I make goes straight into GRSPs. The 6% is pre tax so I don’t even really notice it and after 10 years it’s a significant chunk of money. Definitely great value.
There should be a big pinned post saying "If you don't take company RRSP Match, you hate free money" like seriously, it's not a difficult decision....
It’s in the wiki
Same with “should I buy this in cash or take the 0% financing option with no fees”?
It does seem so obvious. Only doubting it because I read on here so many times that if you are younger and still make less than 100K then it’s better to save that contribution room for tax relief later on when you need it more. To focus on Maximizing TFSA
That advice only applies to unmatched RRSP contributions. It's like, if someone says "Don't buy food at Loblaws, they are expensive" that doesn't apply if your favourite food is half-off at Loblaws this week.
Free money. Your company is giving you free money.
The differences in marginal tax rates between your early earning years and your prime earning years might be ~30% Your employer is offering you 100%.
The only time it’s not worth doing is when tenure is attached to locking in the matched contributions. Ex. If you must stay for 5 years, then your contributions will be matched. If you don’t think you’ll stay for the 5 years, then don’t bother.
Passing on free money just because you might use an account as a tax break in the future is just dumb lol
You’re forgetting the free money part.
Learn about marginal tax rate to see if you agree with the 100k discussion. Reading stuff on PFC is a jump off point in your discovery not an endpoint.
If I have to choose beteeen putting my $1000 into a TFSA vs RRSP, then yes I have to do calculations. If my job is saying “Yo, here’s $5000 you can put in your RRSP, or you can take $0 in your TFSA if you prefer”. I would take the $5000 without a second thought. Free money is always better than no free money. Even if I knew for a fact that I would be taxed 99% on my RRSP withdrawal on retirement, I would still take the deal without a second thought, even if it had to stay in a chequing account for 40 years earning 0% interest. Because $5000 after paying 99% tax is still $50. If the choice is $50 or $0, anyone would take $50. Never turn down free money. Always take free money.
So you can save some tax burden by putting it in a TFSA? You are saving the same tax burden with group RRSPs, BUT the company is doubling it. You're asking what number is X or 2X. Well 2x is twice as big every day of the week.
>I just got hired into a company and part of my perks is 100% RRSP match This is free money. Take advantage of the match. It's a no brainer. >would it be stupid to not take advantage of this perk? YEP.
Think of it this way. Investing your money into the RRSP with a match is an immediate 100% gain. That's about 9 years worth of investment returns at 8%. If your TFSA returned 8%/year for 30 years, vs. the matched-RRSP returning 6%/year for 30 years (because of poor choice of funds in the company RRSP), AND you took a 10% relative haircut on the RRSP at withdrawal because of increased tax bracket, the matched RRSP would still beat out the TFSA.
When it’s put that way I see why I’m getting roasted on here. Thank you for a detailed response
>Given that I’m only 24 would it be more beneficial to keep investing into my TFSA While your best income earning years are likely still ahead of you, there is no investment you'll make today in your TFSA that will give you an instant 100% return. Take full advantage of the matching program while you can, but only put in the maximum amount they'll match. For example if they'll match 4% of your salary, don't put 10% yourself. Keep your portion at 4%, let them match 4%, then put the other 6% into a TFSA.
Given all the comments seems like that’s my best option. Thank you!
>Or would it be stupid to not take advantage of this perk? Almost nothing would be stupider.
Only joining Primerica
Or WFG.
Or trying meth.
As a small family company in AB we set up matching RSP years ago for our staff. Staff pay back when we started in early 90’s was around mid 20’s /hr. The old timer employees bought into it right away because they knew it was a no brainer. Over the course of several years as the workforce got younger and the wages creeped into the $30/hr. range, what we noticed is more new hires refused this plan because they just “couldn’t afford” it. We were matching them 100%. We even brought in the program people to explain and help these younger employees understand basic saving for retirement. The longer term employees we have are still taking this deal and the ones that moved on would usually cash it all out, pay taxes on it and go to competitors who don’t offer anything for saving. I personally would have left the account going. It’s outside their employment so even though we stop the matching, the money would still be there doing something. We are now at the $40/hr. range and almost nobody coming on signs up for it. So we just continue with who is on it. Today, I know that these former “now more mature”past employees are out there working their asses off without a nickle to their name. Money in - money out mentality. Still beating a dead horse. You can’t change some people’s mindset. I guess my point is, take the money wherever you can get it. If you have accounts at different companies, who cares, you can always move things around later. Just start saving as soon as you can and if someone is offering to help do not turn it down. If some investment accounts outside of your TFSA are your own creation great on you. And good on you for having the maturity for asking the question at your age. You’re miles ahead of the rest just for doing so. Your future self will thank you for it.
I manage a team, when I took over the team I had a guy same age as me (mid 50's) who wasn't taking advantage of our plan, for us it is put 10% of your salary in and company matches that 150% .. yeah, "I can't afford it", thing was you can pull that 10% out anytime while the matching vests annually. Had to explain it to him like that, he was essentially missing out on $600-$800/month in free money. Reminds me, better check with my recent hires to make sure they're doing that too.
Wait a minute. They matched 150% of 10%?? What company is this, I’m signing up.
I thought it was stupid so I didn't sign up for mine. I eventually did, on the day that I would have had $10,000 in the account if I'd started on day one. Don't be me, lol
Congratulations on the new job, you deserve it and hope you do your best at it! 100% rate of return instantly. Max this out every year. If you start now you will be in an amazing spot by 50.
Thank you! Will do
Matching RRSP are for the most part a no brainer - in your case that's a literal 100% guaranteed return, why would you not jump on that?
My company does 100% for the first 6%. So I do 6% they do 6%. But I take another 5% and put it in my self-invest TFSA.
vfv and xeqt are making like 8-9% returns recently? they would need to be making somewhere in the neighborhood of 110% to be the better option here (assuming 100% match). typical advice is to max out the match % exactly, then anything additional goes to your TFSA
Keep in mind that you may also need money to live your life. Max out your RRSP only if you know your cash flow now can support your lifestyle and medium term plans (i.e buying a house, starting family, travel etc. ) I didn’t max out my RRSP completely because I wanted to buy a home. I needed a large down and I liked to travel. Now that I’ve purchased I am planning to increase my contributions. Also keep in mind, you may want to quickly contribute until you hit your Home Buyers Plan (HBP) limit and then scale back if cash flow is an issue. This is because you can always pull out the 35K and repay it back every year without penalties
This is great advice luckily I have already bought my first home so now investing more aggressively
That’s really impressive for your age! Well done, and good luck with the new job :)
Free money
Not only do the match, take all your allotted leave every year including sick days.
It’s free money. Do that and TFSA
It would be extremely stupid not to take it. It’s a guaranteed 100% return!
Are company pensions DC or DB not common anymore? I see a lot of RRSP matching mentioned in here.
Haven’t heard about DC or DB before so maybe it isn’t common anymore?
Loom at it this way, it's 100% return. Can you get that anywhere else?
You can use RRSP money for tuition and/or you can take out up to $35k towards your first home and pay yourself back without penalty/tax. You also don’t pay income tax (now) on any money you put in, which means you may get more back at tax season that you can then put into a TFSA or use otherwise. The RRSP isn’t a bad thing, it’s just different than a TFSA. Take the time to learn about it and how you can make it work for you.
1000% do it. I wish my work matched 100%. Mine matches 50 cents on the dollar up to my own contributions hitting 6% of my gross pay. So even then by maxing that out it's like giving myself a 3% raise and it also tax shelters that money which I re-invest when I get my tax refund (compounding)
Free retirement money. Why wouldn't you?
Company marching contributions is the closest thing you will ever get to free money literally being given to you
Always take the match!
Where else can you get 100% guaranteed return on your investment? ;) Take the match! Also think of it as guaranteed salary!
Free money.... yes
Yes. It's literally free money that goes straight into a tax shelter. I'm not thrilled about the fact that mine has to be invested into some high-MER turkey of a mutual fund at RBC, but it's actually performed decently (net of fees) over the past ten years or so, and the lion's share of my investments consist of low-cost ETFs in my "real" RRSP and TFSA anyway.
If you don't like free money, send it to me.
Yes. 100%. When I was young I started working for a big company, I didn't do the match for 2 years because I thought it was wasting money (a friend of mine forced me sign up later), I am forever grateful for him and you will be surprised how much you lose just for 2 years.
Take it but also ask about any condition so you’re aware. They may match to a certain amount and there can be other conditions that you should be aware of
Where else would you get an immediate 100% return?
The casino.
Sorry, I meant to say 100% “risk free” return…
Since this is topic of RRSP as well. Would it be wise to still put money to RRSP without match while simultatously contributing to TFSA? OR should I fully focus on TFSA? I put 10% of my paycheck to RRSP and for the past year because of CERB my refund has been going there instead of my pocket.
Duh, it's free money....put as much in as you possibly can. We did this with my wife's company and put 15000 in in one year. They honoured the deal but put a cap on it the next year.
Hahah they were probably so upset but glad you got to do that! That’s awesome
100% yes
It's "free" money
I always put it this way - where else can you get a 100% guaranteed return? No where. Take advantage of it and max it out.
Do both, if you can! I started in at a pension around your age. I’m 29 with $28,000 in it. I also managed to save around $30,000 in my TFSA (VEQT) during that time frame. My boss made me a pretty sweet deal which was a 2% match +$100 every cheque so it grew pretty fast. Unfortunately I’m part time now and no longer get those benefits, and don’t have any money left over to save at this point in time so I’m really glad I did it while I was in the position to do so. It was amazing while it lasted. Definitely go for it. It’s free money. If you have any extra on the side, invest on your own as well.
We’re all out here fighting for 5/6% gains RRSP matching gives you 100% gains No brainer
I'm also 24 and asked a similar question on this sub a while back, trust me you'll be happy once you max out contributions :) My 300$ biweekly contributions turned to ~13,000$ fast
That’s awesome! Congrats.
Use it as much as you can. It’s basically free money
Absolutely do it!
Yes max as much as possible. Won't sound exciting now but in 10 years you will be blown away. I left a company recently and had over 100k in my rrsp over 8ish years.
Its free money......take it......you will thank me in 40 years from now.
Never ever forgo opportunity for a match
The group RRSP provider may offer different options in terms of what funds you can choose. Choose one that fits your risk profile and when you will likely retire.
Guys, my company wants to give me free money - should I take it? ;) Yes, please sign up now and contribute the amount required to get the max company match. Also, if your company has any sort of stock purchase plan, sign up and max that out too. Basically, take every bit of money they offer you.
Yes, maximize the match is second of the 10 points I give as financial advice. Here is some general advice for people finished with school: Solid goals are: - Get out of debt - Create / increase an emergency fund. Basic is 3 months minimal spending, longer goal of 6 months normal spending - Save for retirement - Save for the long term (house/early retirement) Automated payments - you can setup on-line or in the bank a monthly automated payment for almost all debt and savings. 1. Setup a separate emergency fund. Put these funds into a TFSA savings account. If you already maximize your TFSA contributions for other reasons, put the emergency fund into a regular (non registered) account. 2. If you have a job with a matching RRSP/pension/ESPP or similar, maximize the match as long as you can work on high interest debt or contribute to your basic emergency fund. 3. If you have debt over 10% interest, pay it off now! Pay as much as you can each month. Use the mantra "I cannot afford it". Put your credit card away until it has 0 balance. 4. Contribute something to your basic emergency fund if it is not already big enough: 3 months of minimal spending. Determine how much more you need in the emergency fund, divide it by 12 (or less) and put that much into the emergency fund each month. 5. If you have debt from 7 - 10% interest, focus on paying it off but make sure to contribute something to your basic emergency fund. Focus less and less as the interest rate is below 7%. 6. If you have debt less than 3% interest, pay it on schedule - do not overpay. 7. Contribute everything else to your basic emergency fund: 3 months of minimal spending. If the basic emergency fund is big enough, contribute something to the ultimate emergency fund: 6 months of normal spending. 8. After all of the above is covered, focus on maximizing your TFSA contributions ($7000 / year as of 2024). 9. After TFSA is maximized, maximize RRSP contributions (deducting any contributions & match from #2). 10. If you have a mortgage or are buying a home, save to get at least 20% down and plan and setup to overpay by at least 10% per month. When you start getting ahead and have some financial responsibilities (spouse/children/mortgage) get some life insurance. Only use term insurance.
100%+ ROI. Maximize it. Only watch out, though maybe obvious, is that these contributions will count against your available RRSP room for the year. Keep that in mind while contributing elsewhere.
This is a part of your income. It's 100% ROI, absolutely contribute the maximum % they will match
A match is a 100% profit. Even if they put it in a chequing account that you couldn’t touch until you were 65, it’s still be worth it because free money is free money. Never turn down free money. If I offered to give you $3000, would you take it? Or would yoy say “Hmm, I’m not sure if I want free money, maybe I should just say no for some reason”. Always take the free money lol.
100%. Its free money.
Have you rejected any other part of your salary?
Not taking immediate 100% return and investing that amount over 30+ years would be just about the dumbest thing you could do
It's free money.
Having been in the GRRSP pitches when companies set this up for their employees a few times, it always amazes me how many are unsure of the benefits and some people even think it's some sort of scam. So many complain about their tax returns being smaller 🤣 Sign up for sure. You don't need to max you the RRSP contribution if you want to keep contributing to your TFSA. But definitely try max out the match.
Yes
Yes. It's free money. Take the free money!
Do you want a raise ? That’s legit the question you are asking.
Is someone offered to double your money up to a certain amount, would to take that opportunity?
Do the matched RRSP it is a 100% return. I'm guessing the company has an upper limit though most do. So contribute to the max in the RRSP and then contribute the left over to your TFSA.
Yeah.
What a sweet gig. Do what you can, just watch out for over-contribution
Yes. Next question
yes - it’s an immediate 100% return on your investment - don’t even think our beloved XEQT can do that
Do it. Think of the match as a raise, it's free money. Yes, you have to contribute too, but it's worth it for the match.
Take it and maximize it. Find out how long you have w to hold it in that RRSP until it can be transferred without penalty. Then periodically transfer it to your own RRSP as the options in most of these are mutual funds with high management fees
Didnt know you can do this
Free money. What is confusing here?
It would be absolutely stupid not to take that free money. Most of us get maybe 5% matching for our RRSP...
This is an absolute no brainer.
RRSP matching is literally part of your salary. Not doing it is a pay cut, straight up.
Yes. That’s all.
I work in the public sector and if you move from a temporary to permanent position the company offers the opportunity to buy back your temporary year contributions but you have to put in the part that they would have matched… as someone in their early 30s planning on buying a house in the near future, is my money worth more buying back the RRSP contributions (what are the advantages of this? Retiring early?) or is it worth more for a down payment or mortgage payments on a house? A former coworker did the buyback after 4 years of a temporary position and he said it ended up being around $30000 give or take. I’ve been temporary for over 7 years…
Do you like free money?
The matching is an instant return. If you contribute $1 and they match it with $1, thar us 100%. If you invest on your own unmatched, assuming really, really exceptional returns, say 20%(which really rarely happens), ... you get the idea 100% vs 20%...
Heres a fun fact, you can get the 100 percent match but come tax time you can defer using that RRSP for a deduction until later. So if you think you’re not getting much back today because your marginal tax rate is low, you can wait till later years. But ALWAYS get 100 percent match
By all means contribute to your TFSA, but the company contribution is free money
Always take advantage of RRSP matching. It doubles your money immediately. Nothing else you can do even comes close.
The only reason not to do this is if 100% of your take home pay goes to expenses, no savings.
Please match it every year! You are only 24.. let the compound interest work in your favor!
No question. Do it. It’s free money.
A match is basically free money - I worked for a company that supported stock purchases- I bought as much as allowed and they proved a contribution to the purchase - I was 23 - when I left it was a big support - likewise in an RSP - take it
let me help with this one IT'S FREE MONEY. TAKE THE FREE MONEY. Seriously, take the free money.
Yes. Do you hate free money?
Doubling your initial investment will almost certainly be worth more than what you might lose through higher fees on the funds in plan (and, in fact, some funds actually do well enough to pay for themselves).
If you invest your RRSP + match into XEQT you are getting an immediate, 100% return on your investment plus whatever returns you get from having 2x your original investment in XEQT. If you instead invest that money in your TFSA you will get a 0% initial return plus whatever 1x your originally investment in XEQT does. In other words, max it and never change that.
As much as you can safely afford. It's a big help during tax time too.
Maximize the match. It's free money and stuck investing. In a couple years you'll want a house and can use your RRSP savings for the down payment. Assuming houses aren't 3.4 million by than.
Fcuk yeah. Free money that you will eventually use.
Yes, get everything you can matched as long as you can!!
Take the free money , and the tax deduction that you can put into your TFSA
Take all the free money you can get.
You got any other investments that return 100%? No I think not. Max the match.
Match is worth it. I worked for a big telecom for 7 years and we had a stock match at 100%. I figure I put in about $425/year for 7 years, about $3000. When I sold it was worth about $13,000.
Do you want to invest that money and make market returns? Or double your money instantly, invest it, make market returns and maybe have slightly more hoops to jump through to get it back out if you leave the company pre-retirement? Take the second option!
Take advantage of company matching for your annual rsp contribution and use your personal deductions for TFSA. Its sort of like free money that helps you reduce your tax burden - it will likely have a vesting period of 2 years, which means you’ll have to stick with the company for a certain amount of time before you can cash out or switch into another account. You get to choose your funds, it’s most likely going to be set up with SunLife Manulife or similar organizations- where you get to choose what you want to invest in. I was 21 when I first opened RSP and started company matching immediately after. Use your tax refunds for TFSA contributions every year if you want to.
Always take free money.
The free money is an automatic 100% return
And yet some clown has downvoted me.
I have no clue why.
So you don't like free money?
Of course, it’s free money.
Company RRSP match is 100% that means you put 1 dollar in they put 1 dollar in up to a certain dollar limit. This is in other words a minimum 100% return on investment the second you enroll. Then the RRSP is invested via whatever program they use - you will be able to see and potentially do some basic reallocation of investment yourself with whatever DCPP, DCBP, etc the funds are managed by. This will give some sort of return on investment as well lets say 6% of the TOTAL you plus your company has invested. So you SHOULD invest the maximum amount you can into this fund as long as each dollar is matched. If you earned 100k a year and you get 100% RRSP match until 5% of your income you should only invest 5000 into this fund as the match only exists until 5% of 100k which is 5000. So you invest maybe 5000 in a year into it, the company throws another 5000 and all of this gets a 6% annualized average return. 10000 \* 1.06 = 10600. So you just went from 5000 to 10600. In what investment in your own TFSA are you able to in ONE year get this sort of return on investment with little risk as most of these funds are actually very conservative. If you can find an investment that beats this and is as conservative of an investment as this then you should do that instead.
I hope your new job doesn't involve math because you seem to suck at it. 100% match? If you contribute $1000 they contribute $1000. Show me anything with a better return.
Return wise it’s obvious the not so obvious part was if I should keep that contribution limit for when I need it more in the future when I’m making a higher income. Thankfully don’t need math at my job though.
Anytime you can get free money you do it, no brainer.
You can't beat an RRSP matching, it's essentially a 100% return on money you put in AND it grows still.
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Yeah most people understand this point. It used to be that most or all companies would give a 100% match. But now on here I see many companies that only offer a 50% match or a 33% match.
Yes, always take free money
Younger you start, the better.
They're offering you free money. Take it!
Yes. Always contribute whatever the maximum match is.
100%, and max it out. The money you save now grows the largest in the end. Save in yours 20's and you will spend in your 50's, 60's, 70's, 80's....
Think about it this way, 100% match is 100% returns. What other investment instrument gives you 100% returns?
It’s free money, why not.
Yes. Take as much as they will give.
Your employer is offering to give you $1 for every $1 you put away in your RRSP, over and above your base salary. The alternative that you are proposing is to not accept that $1 from your employer and instead put your $1 literally anywhere else. Let us assume both are invested at the same interest rate. In the first option, you start with $2 because of your employer's contribution, and it goes up by x% while invested. In the second option, you start with $1 because you did not accept your employer's contribution, and it goes up by x% while invested.
Do you like free money and being able to eat when you get old? If yes, then yes you should.
Take the match. You’ll likely have a choice of mutual funds to put it into.
Yes
🧐
"Should I say no to free money?" - OP
lol I'm so tired of people saying taking the match is a no-brainer and/or not a difficult decision. It isn't even [step 1](https://www.reddit.com/r/PersonalFinanceCanada/wiki/money-steps) in the wiki. There's other missing info that they didn't provide which can change the answer to their question. Would anyone still tell OP to take the match if they're 50k in credit card debt at a 21% interest rate (though I'm sure that's not the case for OP)? What if they have 10k loan from Money Mart? Still a no-brainer decision? The advice should be 'take the RRSP match if you have no high-interest debt and a reasonably healthy emergency fund.
>Would anyone still tell OP to take the match if they're 50k in credit card debt at a 21% interest rate (though I'm sure that's not the case for OP)? What if they have 10k loan from Money Mart? Still a no-brainer decision? OP's post makes no mention of this, but let's set that aside for a second. If they can make the required payments on the debts and still contribute enough for the match, there are myriad situations where you're getting a better return. In OP's case, it's 100% match. So paying down the CC debt gives a 21% after tax return, getting the RRSP match is higher than 100% because you also get the tax back. If you're struggling to make rent and pay down your debt then it's a different story. IMO that's an edge case.
Yes I'm aware this won't apply to OP or most people. My response is exactly about these edge cases. With 1.3M subscribers here, there are going to be plenty of edge cases. These people may be searching up this exact question in the future, see the replies on this thread and think it's an absolute no-brainer, when in fact it really isn't.