In addition to achieving the best of their potential in life, everyone wants to age gracefully and live comfortably in their prime years. As a matter of fact, no one deserves to go through financial strains at their prime years in life and if you’re keen enough on today’s topic, this is why many people start saving early for retirement. Having a reliable retirement plan allows you to stress less as you enjoy your life and tick more items off of your bucket list without having to worry about going broke or becoming a bother to your family members. If you have a touch in entrepreneurship or you’re good in business, you can also withdraw your retirement fund in a lump sum and invest the money in a project that will be generating passive income for you and your family for many years to come. At this point, you’re most probably a senior and without a doubt, society owes you some respect and appreciation for the good work you’ve done over the years.
Apart from supporting your basic needs and upkeep at retirement, some retirement schemes also offer you additional benefits such as medical insurance, including policies that cover disabilities acquired while on the job through retirement. As you will see if you browse here for more info, workplace-related disabilities are becoming increasingly common and as an employer, it’s best to keep in mind that these disabilities may extend into the victim’s retirement life. Actually, organizations with this sort of health insurance policy in their employee benefits package tend to attract and talent the most.
Nonetheless, it’s a benefit that you may lose as soon as you turn 65 from your employer and retire. The best thing, however, is that you can always seek an alternative medical insurance package as a retiree. To cut the long story short, everyone needs a reliable retirement savings plan as soon as they start generating significant income. It’s never too late to start saving for retirement. Whether you’re employed or you’re an employer in Canada, you have two main options to choose from, which include the individual and group RRSP.
RRSP basically stands for Registered Retirement Savings Plan. It’s basically an account that acts as a vehicle for retirement savings and investments for people who earn an income in Canada, whether they’re employed or self-employed. This money is not taxed when the contributor or account holder makes their contributions. Rather, it’s only taxable when the account holder or their beneficiary makes a withdrawal. As revealed in the title, there are two main types of RRSPs, whose major difference lies in how they work:
This is arguably the most common option in Canada, where the RRSP account is registered in your name. You direct funds into the account depending on your income levels and unless you introduce a beneficiary, you’re the sole owner of all proceeds or tax advantages that come from the Individual RRSP. One of the major advantages of this is that you can get an advisor to help you build a portfolio with a self-directed RRSP, which can hold various investments in the umbrella of a single RRSP.
On the other hand, a group RRSP plan is suitable for employees whose employees have this included in their benefits package. At the end of each month, automatic deductions are made from the employee’s paycheck and a certain portion is directed to. This portion is an amount set and agreed upon by the employee. In some cases, the employee may choose to break down the deductions into smaller payments depending on their specific financial obligations and how often their paycheck comes around.
With a group RRSP, employers can encourage their staff to save more for retirement. Additionally, employees have control over their contributions and depending on their financial commitments, which means that they can invest as little or much as they wish. After all, it’s for their benefit. Moreover, your staff can have the option of investing money under a spouse’s name, from which they can create savings from household income tax. Additionally, you can always tailor your plans to suit the needs and budgets of your employees with group RRSP. What’s more, employers can always claim group RRSP amounts as a deductible expense, not forgetting that to employees, it’s more cost-effective when it comes to administration fees.
Retirement is a beautiful thing. However, it’s even more beautiful when you’ve saved enough to live comfortably and probably tour the world without having to worry about being behind on your bills or receiving calls from stubborn creditors. Of course, you can take up one or a few part-time or volunteer jobs as a retiree, but at this point, what matters most is your happiness, comfort, relaxation, and satisfaction.