Posted on: 15-04-09 04:58:03
My company havning option for all emplyee that if employee contribute 10% amount of salary they will add another 10% amount in cpp.
is it good to save money for future?
My one friend says at the time of retirement we get OAS, RRSP, CPP together. if i invest more money right now in cpp i will get less money from OAS.
Anybody have any more knowledge about this matter because it i start deductiong money from my paycheque there is no more option to cancel it in future.
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pranav shah
It's probably a company pension plan and not CPP contribution - pl. double check that part.
I think this is a great benefit provided by your company and you should definetely take advantage of it.
10% of salary is a good contribution on their part - you can think of this as getting a 10% raise every year for free !
It is true that after retirement if your income is above a certain level, there are OAS clawbacks, however, that is a small amount and insignificant when compared to 20% of your salary contributed to a pension plan over a period of many years.
Just a get a few hundred extra $$ on OAS you should not let go of this benefit.
As for RRSP, if you have a company pension plan, your RRSP contribution room reduces, which will be good for you.
You can also start RRSP meltdown earlier to minimize the impact.
Spousal RRSP is another option for minimizing the impact.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Quote:
Originally posted by pratickm
It's probably a company pension plan and not CPP contribution - pl. double check that part.
I think this is a great benefit provided by your company and you should definetely take advantage of it.
10% of salary is a good contribution on their part - you can think of this as getting a 10% raise every year for free !
It is true that after retirement if your income is above a certain level, there are OAS clawbacks, however, that is a small amount and insignificant when compared to 20% of your salary contributed to a pension plan over a period of many years.
Just a get a few hundred extra $$ on OAS you should not let go of this benefit.
As for RRSP, if you have a company pension plan, your RRSP contribution room reduces, which will be good for you.
You can also start RRSP meltdown earlier to minimize the impact.
Spousal RRSP is another option for minimizing the impact.
yes you are right,
i went through more information as per you said
This is company pension plan and they said up to 4% of salay deducted and they will add 4% in company pension plan. (sorry 10% money can deducted as per company stock purchase plan and they will by stock behalf of me with 15% discount by current market price).This plan money will be invested through Manulife Financial company and employee have right to choose where to invest his money. but this moeny is totally locked i can not withdraw amount after 2years of service.
but i am thinking as per 4% they deduct 1600$ each year and they add 1600$ each year in my account. I dont know how long i will stay with this company atleast not up to retire aged ( i am 32 year old now).
let's say up to 60 years i will invest $ 45000 and my company will invest $45000. by the time investment gain and other bonus applied. I dont know how much money will be when i will be 60 years, but how much amount affected wiht OAS?
do you have any website which can calculate all this matter? means if i have this many amount with company pension plan then how much i will get OAS and other money?
you know after deduction 14%( 10% stock +4%cpp) of salary atleast i need some money for monthly budget.
please reply
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pranav shah
Quote:
Originally posted by pranavshah77
......do you have any website which can calculate all this matter? means if i have this many amount with company pension plan then how much i will get OAS and other money?
Follow this http://www1.servicecanada.gc.ca/eng/isp/oas/oasrates.shtml to get some of the information you are looking for.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Pramod-ji has already provided you the OAS and GIS calculation links.
To answer your other question -
Quote:Even 4% is not a bad deal, not as good as 10% obviously, but even 4% is like getting a free raise every year.
Originally posted by pranavshah77
This is company pension plan and they said up to 4% of salay deducted and they will add 4% in company pension plan.
You can look at it this way - if you don't go for this plan, you will have to do your own RRSP anyway (unless you don't have any need to save for retirement for some other reasons).
So if you do RRSP on your own, you will have to make the full contibution out of your own gross salary with no company match.
But this way, you can at least get 4% match.
A company-sponsored defined contribution plan (like yours) and RRSP are both different ways to save for retirement.
These are not as juicy as defined benefit plans, but are better than doing nothing at all.
Quote:Will the stock be held inside the pension account or outside?
(sorry 10% money can deducted as per company stock purchase plan and they will by stock behalf of me with 15% discount by current market price).
Will the stock be locked in for a defined period or can you sell when it becomes profitable for you to do so?
I don't know which company you work for and what the stock performance history is, but don't put all your retirement money into the company stock (remember Enron and WorldCom employees
Quote:Yes, I believe if/when you leave the company, it will get converted into a LIRA.
but this moeny is totally locked i can not withdraw amount after 2years of service.
In some cases, you may be able to transfer the pension to your next company if they have a similar plan.
Ask your company's Benefits Administrator.
Quote:Since you are 32 years old right now, IMO, it is too early to worry about OAS
let's say up to 60 years i will invest $ 45000 and my company will invest $45000. by the time investment gain and other bonus applied. I dont know how much money will be when i will be 60 years, but how much amount affected wiht OAS?
It's good that you are thinking about retirement saving and taxation, but don't make decisions based on how much OAS clawback you will suffer 33 years from now.
Also, go for these kinds of plans if you are debt-free i.e. no credit card debt, student loans, etc.
If you have those, use your monthly savings to pay those off first.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
