Group RRSPs
Registered Retirement Savings Plan (RRSPs)
RRSP allows you to save during your prime income earning years. This is done through making contributions to a savings account. The benefits are that the individual will receive a tax deduction on their contributions to an RRSP. As well the payment of taxes is deferred until withdrawals are made, which is usually when the individual is retired and therefore has a lower marginal tax rate. The two main benefits of an RRSP are that they provide you with a tax break, and the investment can grow without tax consequences until you retire. RRSPs help you save for long-term, but in an emergency you can take out the money because you do not have to wait for retirement to take money out, however if you do take out money before you retire, you will be taxed on the amount you withdrew.
Group RRSPs (Group Retirement Savings Plans)
Group RRSPs are a valuable add on to employee benefits. They provide similar benefits to an individual RRSPs except the employer, union or professional association administers them on a group basis. The Group RRSPs allows for a portion of the employees pre-tax income to be put towards RRSPs. The employer then has the option to match that contribution wholly or partially. The savings are not locked in and can be accessed by the employee whenever he/she would like, depending on the agreement.
This benefit can be easily attached and compliment an employee benefits plan and is a beneficial way to help employees save for retirement with little administration costs and implementations. Employees who are prepared for their future will be valuable to your organization.
Advantages of a Group RRSP:
· Tax relief to employee
· Minimal government reporting
· Low or no administrative costs
· Flexible when considering employee eligibility and contribution levels
· Lower minimum deposits
· Income splitting can be available through spousal contributions
Getting started with an RRSP as early as you can is important, that’s why we at Svab Insurance Inc. will be happy to answer any further questions you may have. Contact us today to set up an appointment to help you bring peace of mind knowing that your future or your employees’ futures are in proper hands.
