Should I opt in to my employer's RRSP matching program?

Clients often ask whether they should utilize their employer’s RRSP matching program. This perk has the potential to significantly impact your financial future. The following video outlines the key advantages of participating in your employer’s RRSP matching program.

Video transcript

Are you looking for ways to maximize your retirement savings and secure a comfortable future? If your work offers an Employer-Matched RRSP this could could be a great way to do this. Here are some benefits of an Employer-Matched RRSP.

Boost your retirement savings

Additional contributions made by your employer increase the amount you are saving for retirement and will accelerate the growth of your retirement fund.

Contributions lower taxable income

RRSP contributions generally are tax deductible. Often, the amount contributed by either you or your employer will reduce your taxable income and, as a result, will lower your tax paid.

Immediate return on investment

The amount the employer is matching can essentially be considered free money added to your retirement savings. For example, if your employer has a 100% matching policy, for every $1 you invest, you immediately get $1 on your investment.

Automatic savings

Employer-Matched RRSPs are often automatically deducted through payroll deductions. This automation creates a consistent savings habit and can help keep you on track to your retirement goals.

Long-term compound growth

Your contributions and your employer’s matched contributions, along with potential investment growth, can lead to significant compound growth over time. The compounding effect allows your retirement savings to grow faster, leaving you with more money for retirement in the future. Some employer plans may have rules about when you can access the funds they contribute. This may include stipulations that you can’t withdraw their contributions until a certain number of years have passed or until you leave the job.

It’s important to understand this before starting to contribute. By taking advantage of your Employer-Matched RRSP contributions, you can set yourself up for a worry-free retirement.