The content on this website may contain affiliate links or sponsored content. This means we earn money from brands when readers click through, purchase, or sign up through certain links. Clicking the links won't result in any additional cost to you, but it will support our blog. Thanks!
Employer Pension Plans
Your personal contribution will come out of your paycheck pre-tax, and the company will most likely automatically contribute and invest for you in a company run plan (in Canada this is how it works for the most part – but check with your employer).
I love it because I never see my portion of the contribution money in my bank account, I am not tempted to spend more and lose out of investing. Also it is like getting free money – psychologically speaking – even though its actually a part of your compensation. The company may have a financial team that runs the pension fund and invests on behalf of the employer. For my situation, I don’t need to pick stocks, transfer anything extra, or be involved.
I work in the public sector, and many employers offer pension programs. I’ve been contributing to a pension with employer match for the last 12 years.
I switched employers during that time and was able to transfer over most of the pension contributions to my new employer’s plan.
Today at 40 years old, I have over $130,000 in that pension account- half of which was contributed by my employer. This will provide me (based on today’s estimates) somewhere in the range of $5,000 a month when I retire.
Take a few minutes to contact your benefits office and inquire. It may only involve you completing a few forms to get started. Really painless.
If your employer does not offer a pension plan, or 401k, then it all falls on you to prepare for your retirement. You should begin investing as early as you can. Even if you are starting with only a few dollars per pay. Just getting started with an RRSP or TFSA investment account is most important.
Want more content like this? Check out the Finance and Investing Section of the blog!