A group RRSP is a great way to grow your savings faster. That's because even saving small amounts regularly brings surprisingly big rewards. You can save without giving up life's little pleasures.
When you enrol in a group RRSP and start contributing through payroll deductions, you benefit from day one. You get an immediate tax break and you don’t pay tax on your savings until you decide to take the money out. A classic win-win.
There are other key benefits to group RRSPs. For example, competitive fees that keep more money in your pocket. Many group RRSPs also offer a range of investments you might not be able to access on your own. Plus, some employers offer matching programs where the more you contribute, the more you get. It all adds up to many ways to save for retirement.
Take this quiz to discover all the great benefits of a group RRSP—and boost your savings!
Question #1: What are the benefits of a group RRSP?
a) A group RRSP has higher fees on your investments and fewer investment options
b) A group RRSP offers competitive fees on your investments, a range of investment options, optional payroll deductions and, in some cases, employer contribution matching
c) A group RRSP offers more competitive fees on your investments
d) A group RRSP has higher fees, more investment options, and optional payroll deductions
The correct answer is B. A group RRSP offers more competitive fees, a range of investment options, and optional payroll deductions. Some employers offer contribution matching as well. All this adds up to more money in your pocket now to enjoy life's pleasures—and more money later in retirement.
Question #2: What can a group RRSP help you save for?
a) A group RRSP can help you buy your first home
b) A group RRSP can help you pay for education
c) A group RRSP is a great way to save for retirement
d) A group RRSP is a great way to help you pay less tax today and in retirement
e) All of the above
The correct answer is E. A group RRSP is a great retirement savings tool and can be used for so much more.
The savings in your group RRSP grow faster because you don't pay tax on them until you take the money out
Every contribution lowers your taxable income, so you pay less income tax while you're saving
The Home Buyers' Plan and the Lifelong Learning Plan allow you to take money out of your RRSP without paying tax, provided the full amount is repaid within the required timeframe
Question #3: How much money do you need before you can start contributing to your group RRSP account?
a) You need at least $1,000 before you can start contributing
b) You need at least $10,000 before you can start contributing
c) There is no minimum amount, but you need to contribute regularly
d) There is no minimum amount and contributions are entirely voluntary
The correct answer is D. There is no minimum amount and contributions are voluntary. Even small regular contributions add up because they lower your tax bill and any savings inside the RRSP are tax-deferred until you take them out. The more often you contribute, the more you'll benefit in the long run. Contributing through payroll deduction to a group RRSP makes saving easier—without having to give up enjoying life today!
Question #4: True or false: Many employers will match your group RRSP contribution, dollar for dollar, up to a certain amount.
The above statement is correct. If you contribute to your employer’s group RRSP program, many employers will match your contribution, up to a certain amount. This is like getting a pay raise (or free money) just for joining and participating in the plan. And it makes your savings grow even faster.
Question #5: How can you make your group RRSP work harder to grow your savings?
a) Payroll deductions help grow your savings consistently
b) Each RRSP contribution reduces the amount of tax you pay on your earned income. And, if you contribute through payroll deduction, you get an immediate tax break
c) If your employer offers a contribution matching program, you'll be saving even more
d) All of the above
The correct answer is D. There are many benefits to contributing to a group RRSP. When you contribute through payroll deduction, you get an immediate tax break which keeps more money in your pocket to spend any way you'd like. In the longer term, your savings grow faster and you'll likely have more to spend later when you take the money out during retirement.
A group RRSP is a great way to save more without giving up life's little pleasures. And remember:
You save while lowering your income tax bill
Regular payroll contributions help your savings grow faster
Competitive fees and a range of investments to choose from
Employer matching program (if available)
Contribute to your group RRSP today.
Need help? For more information and instructions on how to add money in your plan, visit the support page here.