Even though it still takes years, or even decades, until you retire, you need to think about your retirement when you are still in your prime. You need to think about how to make an income once you can’t go to work any longer. This is why RRSP is very important. If you want to take full advantage of it, it is actually better to open group RRSP account.
There are several advantages about the group plan compared to the individual one. The contribution for the RRSP will be deducted automatically from the employee’s payroll. The best thing about it is the fact that the employee will not be taxed for that contribution. Furthermore, since the administration cost is very small, you can still have enough money even though your payroll has been deducted.
Furthermore, this plan is not only beneficial for the employee, but also for the employer. Since the employee already has a retirement plan, the employer doesn’t have to pay a certain amount of money for the RRSP plan holders when they are retired. Moreover, to encourage the employees to contribute to the plan, the employer can also contribute a certain percent to the employee’s RRSP account. This is definitely beneficial for the employees since they can get bigger amount of retirement money without cutting too much of their payroll.
Even though individual RRSP has more investment options than the group one, group plan is still a great investment for retirement. Even though it is a group plan, the account is actually flexible so you don’t have to worry about anything. If you resign from the company before you retire, your contributions will not go in vain. In case where you have to stop your group RRSP contribution, you have the options to take the money or switch to individual account.