Employer Pension Match

Pension contribution

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Here is how spending just 10 minutes made me $130k over the last 12 years.

Employer Pension Plans

If your employer provides a pension plan, Group RSP or 401k program, you are among the lucky ones. 
Taking just 10 minutes to contact your HR department and register for the Pension Plan is a very easy way to start investing, without having to worry too much about how to do it yourself.  

Not all companies will offer a contribution matching program, but if yours does, make sure to sign up immediately – or as soon as you are eligible.

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.

I never felt stressed about contributing.  The money is taken out directly from my pay before it’s deposited in my bank.  I never had it in my pocket to feel like I was giving something up. 
If your employer offers a pension plan, group RSP or 401k with employer match, signing up should be a no-brainer.  You should contribute up until the level they will match your contribution. For example, if they will match 7% of your wages, you contribute 7%

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.  

If you don’t know where to start with investing, you can find out what are the 6 things you need to consider before investing, and then, get a great overview of investing in Canada. 

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