Do you know if your company has a pension plan? All too often employees are very unaware of all the employee benefits their company has to offer. Even if they have a pension plan they are often unaware of most of the details around it.If your company does have a pension plan, consider yourself blessed. Not nearly as many companies offer them as in the past. However, it is important that you understand what exactly you will be entitled to when you retire or leave your current job. Also, if you want to ensure adequate funds during retirement, you are going to want to make sure you are contributing towards your pension plan if applicable.
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retirement savings
On the Service Canada website, there is a calculator that is quite interesting and eye-opening. It takes you through a series of steps to help you to determine how much income you can expect during your retirement based on projections for Canada Pension (CPP), Old Age Security (OAS), and a number of other factors.
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Although the official deadline has passed now to be able to use your RRSP contributions for the 2010 tax year, it doesn’t mean that RRSP season is over. In fact, it is better to contribute to your RRSP all year round than wait until the last possible minute to put a lump sum into it.
This year I challenge you to set up automatic payments into your RRSP every time you get paid. That way you will not have to burden yourself with coming up with a lump sum every year. If you discover that you still want to put in more, then you can top up your contributions before the deadline, but the lump sum will be far less of a burden.
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If you had to withdraw funds from your RRSP in 2010, the good news is that you still have until March 1, 2011 to make a contribution to help offset your withdrawal. Although you will never get your contribution room back for the amount you took out, at least you won’t suffer as many tax penalties by putting some or all of the money back.
However, before you decide to put the money back, make sure that you can truly afford to do so. If you don’t already have some money set aside for emergencies, then it is probably better to refrain from adding any additional money into your RRSP. Why? Because you are just as likely to end up having to make another RRSP withdrawal and then it defeats the purpose of contributing to an RRSP altogether. Just be prepared to pay some tax in the Spring.
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Have you ever stopped to think about how long your retirement may last? For some people, retirement can be as much as one third of their lives! That can be a daunting thought considering we need to prepare for retirement during our working years and hope we have saved enough.
Due to advanced technology in the healthcare field, it is much easier for many folks to live a lot longer than they might have anticipated. In order to prepare thoroughly, we must start saving for retirement as soon as possible.
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There is a lot of dialogue these days about women and retirement. The word out there now is that women need to save a lot more than men for some key reasons. As a rule, women generally live longer than men, so for that reason women really should be tucking extra away in their RRSPs and other retirement savings accounts.
Another key reason is that women often earn less than men, partly because they take time off to have children, but also because there is still a disparity between men’s and women’s wages. Men are generally still paid more than women for the same work. This makes it harder for women to save as much as men for their retirement.
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Most Canadians are aware of the existence of Registered Retirement Savings Plans (RRSPs) but they really do not know much about how they actually work or how they can use them to benefit them fully. Until just a few years ago, I thought that once you turned age 65, you were allowed to take the money out of them. How little did I know! Unfortunately most Canadians are still in the dark about RRSPs and when it is wise to use them.
RRSPs can be especially useful for regular employees who pay a lot of tax on their employment income. By contributing to an RRSP, they are allowed to defer their income tax. They benefit from lower taxes payable now, and then will expect to pay it later when they withdraw it (presumably when they retire and are at a lower tax bracket).
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