Key RRSP Tips for Employees at Each Career Stage

It’s RRSP season in the world of benefits and financial services because as most of you know, the RRSP deadline is coming up!

As a reminder, contributions to RRSPs made in the first 60 days of the year can be applied to the previous year. In plain language, Canadians can reduce their taxable income for 2024 with RRSP contributions up to the RRSP deadline of March 3rd, 2025.

With this in mind, we wanted to provide some simple tips and suggestions for financial planning for employees at three stages in their career, and specifically, how these could be applied within a group savings plan.  

 

Early career- just start saving!

For those in the early stages of their working life, the most important thing is to simply start saving, even if one can only manage a very small contribution.

We often recommend setting up two basic savings accounts- one designated as an ‘emergency/ opportunity’ account, and second, an investment account (Registered Retirement Savings Plan) to begin investing for the very long term.

 

Emergency/ Opportunity Account

A Tax-Free Savings Account works well for this purpose, especially something like a high-interest savings account which will grow steadily-rather than fluctuate- in case you need to withdraw the funds for an unexpected expense. This is ideal for unexpected situations (a vehicle repair) or opportunities (a special vacation) where you would not want to draw from long-term registered savings accounts or use a credit card.

 

Retirement Investment Account

Along with this, and when possible, we recommend joining the Employer Group Savings Plan. Of course, within a Group RRSP, it’s optimal to do at least the minimum contribution to draw the full employer match available, but if that’s not financially possible, it’s beneficial to deposit even the smallest amounts, which will benefit from long-term compound interest. 

rrsp-tips compounding interest

If your younger employees are not eager to join the Group RRSP, it can be worthwhile to show them some of the key benefits such as the impact of long-term growth, and the tax advantages of a registered deposit. For most, a pre-tax payroll deduction is something that actually goes unnoticed!

 

Mid-career; it’s time to serious about planning, from a holistic perspective

For those who are more established in their careers and whose incomes (and families) may be growing, it’s time to really assess your short-, mid- and long-term goals in order to ensure you are on track.

Expenses are often very high at this point, and being strategic with tax planning, investing and insurance is paramount in order to set you up for retirement, even though it may be 2-3 decades away.

If it’s not something you’ve done already, this is the time to run projections in order to learn the specific steps and financial requirements needed to achieve your goals. Additionally, people in this stage of life often require greater amounts of insurance (life, critical illness and disability insurance, for example) to protect their families and assets.

Engaging with a qualified financial planner is the best way to ensure you are getting appropriate advice, but these days, there is also a plethora of information available online. Specifically, your benefits and group savings plan providers offer great education resource hubs.

When it comes to your group savings plan, if you’re not already doing so, this is the time to ensure you are maximizing the employer match. If you have taken the ‘set it and forget it’ approach with your investments, assessing not only your contribution amount in dollars but also your investment choice is essential.

 

Approaching retirement; review and refine

As you approach retirement, it’s important to have a clear sense of your financial position, as well as any insurance needs you may have. The emphasis during this phase is on finetuning.

Firstly, with regards to insurance, it’s important to be clear as to whether you will have health and dental coverage in retirement via your employer, or how you can obtain an individual plan, if there is no employer coverage after you are no longer actively at work. Additionally, insurance plays an important role in estate planning; speaking with a qualified advisor to assess your needs in this area is recommended.

When it comes to income in retirement, ideally, if you have taken proper steps to plan and save along the way, you will not find yourself playing catch up in the last years of your working life. In the last decade prior to retirement, it is time to really look in depth at the various sources of retirement income (CPP, OAS, RRSPs etc) and understand the numbers. What will you receive, and when? Do you need to make modifications to your goals or timelines? Do you have plans to change your residence, and how could a home sale factor into your planning?  At this point, there is still time to make the necessary tweaks or implement revised strategies. It goes without saying, if you’re not taking advantage of an employer RRSP in full, this should be a priority.  

 

Employers- what role can you play?

Remind your staff to pay attention to the amount they’re contributing, where the funds are allocated, and whether this aligns with their goals.

Many employees overlook naming a beneficiary for their registered accounts; this is important as the funds will transfer directly to this person in the event of the member’s passing.

Encourage staff to seek customized advice, that considers their unique situation and goals.  If it is intimidating to reach out to a person, please keep in mind that support is accessible in various ways. Depending on their comfort level and desire for interaction, individuals can choose to access support online, by phone, email or in-person.

 

Why should Employers offer a Group Savings Plan?

If you’re not already offering your team a Group Savings Plan, it’s time to get started! There are so many reasons for Employers to implement an employee RRSP or DPSP. We have written an entire article on this, but here ere are a few key advantages:

  • Tax-advantaged way to reward employees financially
  • Provide a means to save for retirement
  • Provide financial literacy support
  • Reduce employee stress related to finances
  • Retain qualified staff
  • Be a competitive employer in a difficult hiring environment

If you’d like to get started, please reach out to the experts at the Immix Group via email at info@immixgroup.ca or by phone at (604) 688-5559!

Key Takeaways

  • Start Early, Even Small Contributions Matter – Young employees should prioritize starting their savings journey, even with small amounts. Utilizing both a Tax-Free Savings Account (TFSA) for emergencies and a Group RRSP for long-term investments can establish good financial habits.
  • Maximize Employer Contributions – Employees should take full advantage of their employer’s Group RRSP matching contributions. Not doing so leaves money on the table.
  • Mid-Career Planning is Crucial – As employees advance in their careers and face growing financial responsibilities, they must strategically plan for short-, mid-, and long-term financial goals, optimize tax strategies, and review their insurance needs.
  • Pre-Retirement Adjustments are Key – Those nearing retirement should closely analyze their expected income sources (CPP, OAS, RRSPs etc) and expenses, ensuring they are financially prepared. Reviewing insurance coverage and estate planning is equally important.
  • Employers Play a Vital Role in Financial Wellness – Companies should encourage employees to actively manage their RRSPs, name beneficiaries, and seek professional advice. Offering a Group Savings Plan enhances financial literacy, reduces stress, and helps attract and retain talent.

Top 5 FAQs

Even small contributions benefit from long-term compound interest, significantly growing over time. Plus, RRSP contributions lower your taxable income, providing immediate financial benefits.

A Group RRSP often comes with employer matching contributions, which can significantly boost your retirement savings. Additionally, contributions are deducted pre-tax from payroll, making saving effortless.

Ideally, contribute enough to maximize your employer’s match. Beyond that, aim for a contribution that aligns with your long-term retirement goals, balancing it with other financial responsibilities.

Contributions reduce your taxable income, which can lower your tax bill or increase your tax refund. Additionally, investment growth inside an RRSP is tax-deferred until withdrawal, helping your money grow faster.

A Group RRSP helps employees save efficiently for retirement while reducing financial stress. Employers benefit by attracting and retaining top talent, offering financial wellness support, and gaining tax advantages.

Lindsay Byrka

Lindsay Byrka BA, BEd, CFP

Vice President, Immix Group: An Employee Benefits Company
A Suite 450 – 888 Dunsmuir St. Vancouver V6C 3K4
O  604-688-5262 

E lindsay@immixgroup.ca
W www.immixgroup.ca

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Financial Well-being: Valuable Resources through our Partnership with Ciccone McKay Financial Group

November marks Financial Literacy Month in Canada, and this year’s theme, “Money on Your Mind. Talk About It!”, focuses on encouraging open conversations about personal finances. This month, we want to highlight how employers can support their employees’ financial well-being, beyond standard employee benefits, through the unique access that members of the Immix Group Client Community have to our sister company, Ciccone McKay Financial Group.

 

What is Financial Literacy and Why is it Important?

Financial literacy refers to the ability to understand and manage personal finances effectively. It goes beyond just earning a paycheck—it’s about empowering individuals with the knowledge, resources, and confidence to manage their financial health today and for the future. Financial literacy encompasses:

  • Knowing how to budget and save
  • Managing debt effectively
  • Planning for retirement and other long-term goals
  • Making informed financial decisions

For employees, mastering these skills can significantly reduce financial stress, improve focus at work, and contribute to overall well-being. With financial concerns consistently ranking as the #1 stressor for Canadians, it’s clear that promoting financial literacy can have a substantial impact on an individual’s mental and financial health.

 

Supporting Employee Financial Well-Being

At the Immix Group, we recognize that financial wellness plays a critical role in an employee’s overall well-being, and supporting this goes beyond just offering competitive pay and comprehensive employee benefits. While there are many ways you can increase financial wellness through employee benefits such as group savings programs and health/wellness-related resources, we believe that knowledge is the ultimate power when it comes to financial wellness. This is where financial literacy steps in.

In all of our education sessions and update meetings, we consistently emphasize the resources available to your team through our sister company, Ciccone McKay Financial Group. The goal of this article is to provide an in-depth look into the financial services our sister company, Ciccone McKay Financial Group, offers to members of the Immix Group Client Community, the type of support your employees can expect to receive, and how to get started.

 

Immix Group’s Background in the Financial Services Industry

Established in 2003 (but with roots dating back much further!), Ciccone McKay Financial Group has been providing tailored wealth management services, with a strong focus on helping individuals and organizations protect, preserve, and grow their wealth. The Immix Group- which focuses on employer-sponsored benefits programs– was established as a separate company in 2010 but existed previously as a division of Ciccone McKay Financial Group. Thus, our ties are strong!

Today, we still share an office meaning the Immix Group team and the Ciccone McKay team are able to collaborate and leverage the varied experience and specializations of the entire team. Across both the Immix Group team and the Ciccone McKay team we hold a wide range of highly regarded credentials in the financial services industry such as the Certified Financial Planner (CFP) designation and Trust & Estate Practitioner (TEP). This deep financial expertise is a valuable resource to your business and employees.

 

Resources Available to members of the Immix Group Client Community via Ciccone McKay Financial Group

As a member of the Immix Group Client Community, your team has access to the seasoned professionals at Ciccone McKay Financial Group. This includes personalized financial services (see in next section) and educational workshops such as:

  • Financial Planning 101: Building a Balanced Financial Portfolio
  • Setting Financial Goals: Short, Mid, and Long-term Strategies
  • The Power of RRSPs: How to Maximize Savings
  • Your Health is Your Wealth: Exploring Critical Illness, Disability, and Long-Term Care Options
  • Individual Pension Plans (IPPs): Supercharged RRSPs for Business Owners & Executives

These customized workshops aim to provide knowledge, actionable advice, and help your employees gain the confidence they need to take control of their financial future. Interested in arranging an educational workshop for your organization? Click here to contact us and organize a session for your team!

 

The Support Your Employees Will Receive from Ciccone McKay Financial Group

While the employee benefits program provides a strong foundation for financial health, every employee is different, and customization is required in the form of additional insurance and investment strategies and products. 

Through Ciccone McKay, your employees can access a range of financial services, including:

  • Insurance Products (e.g., Life, Disability, Critical Illness)
  • Registered Investment Accounts (Setting Up RRSP, TFSA, and RESP Accounts)
  • Non-registered Investments (Virtual Bank Accounts)
  • Manulife One (Mortgage Banking Account)

 

Here’s how your employees can get started with a Ciccone McKay advisor:

  1. Let’s get in touch: Reach out to your Immix Group service contact person with the employee’s contact information and a brief description of the assistance they’re seeking.
  2. Advisor match: We’ll pair them with an advisor from the Ciccone McKay team who best fits their needs.
  3. Introduction call: The advisor will reach out to schedule a brief introductory call or virtual meeting to assess the employee’s financial situation and needs.
  4. Strategy Discussion: Depending on their needs, the advisor may have an in-depth conversation to discuss products and solutions.
  5. Ongoing engagement and follow-up: The advisory team will provide clear guidance and regular updates, ensuring a seamless process every step of the way.

We encourage plan administrators and HR teams to share this resource with your employees. It’s an excellent way to add value to your employee benefits package and show your team that their financial well-being is a priority.

For easy sharing, we’ve attached a one-pager that outlines this service.

Sharing link: One Page Summary for Sharing

Feel free to distribute it to your employees directly. If you have any questions or need more information, don’t hesitate to reach out. As always love to hear from you!

Did you know?

  • Personal finances and workload remained the top two main sources of stress for Canadians. (Benefits Canada Survey)
  • Only 13% of employee benefits plans include financial support programs (Benefits Canada Survey)
  • 40% of Canadians Report their financial situation as poor or fair. (View the report)
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Top Benefits Conversations of 2022

It’s a wrap! As we begin the New Year with refreshed energy and excitement for what 2023 may bring, we wanted to share a recap of the key stories in benefits over 2022.

 

Extreme Difficulty in Hiring

The theme of our client meetings this year can be summed up in one simple sentence “Where did all the people go?” Businesses struggled to hire (and retain) qualified people. Employers told us they had candidates ‘ghosting’ interviews or simply not showing up to their first day, a trend that most had never previously experienced.

Time and again we were told by employers that they were desperately in need of staff, and that their existing team members were stretched too thin or in roles they were not hired or properly qualified to fill. The labour shortage is evident with a record-tight labour market, according Stats Canada: Labour shortage trends in Canada (statcan.gc.ca).

“Salary and benefits” continue to top the list of most important job factors for employees. Providing and more importantly communicating and highlighting a competitive benefits offering will make you stand out.

top benefits2

The Shift to Hybrid Work

There has been a massive shift in how we work over the past few years. Hybrid work, or working partly remote and partly in-office became the norm post-pandemic, with most employees reporting they prefer working from home.

This has had a big impact in terms of managing and hiring, measuring performance, and ensuring engagement. We wrote about hybrid work and posed the question: Is working from home an employee benefit in two parts. The basic takeaways are that remote work is here to stay, employees prefer a hybrid model, and a formalized WFH policy is a must. 

 

The Great Resignation, or rather, the Great Retirement

The much-discussed Great Resignation did not occur in Canada like it did in the US, but what Canada experienced is actually more concerning:  a record number of retirements.

A record 300K people retired in Canada in the 12 months up to July 2022 (up 30% from the same period the previous year). Early retirement, so those between age 55-65, made up almost half of the overall number of retirees. With our demographics here in Canada, it will only grow larger. With the most experienced people exiting the workforce, there is a real risk to businesses due to the lack of mentorship and transfer of knowledge for younger generations.

How does this tie into benefits? Offering those in the final stages of their career enhanced coverage and work flexibility are potential solutions to entice your most experienced people to stay a few additional years.

 

Continued Focus on Mental Health and Well-being

As we transitioned out of the pandemic, the focus on mental health remained at the forefront. Employers continued to ask for resources and coverage options to ensure their staff had access to the mental health support they required.  

Far beyond the EAP or the dollars available for counselling visits, employers sought various ideas to support mental health including: return to work plans, 4-day work weeks, assisting employees with financial concerns through financial literacy and group savings plans and other programs designed to provide the flexibility needed to better support individuals and families and remove barriers to care.

More than one third of all 2022 Long Term Disability claims are mental health related. Claims for mental health are up 75% from 2019, and experts anticipate this will rise in 2023.

 

High Inflation

A key conversation in 2022 was the inflation we saw across the board; this was especially noticed with the cost of groceries. After years of low interest rates, Canada experienced eight interest rate adjustments in 2022. For many people, this directly impacted their borrowing costs, affecting both personal and business expenses and decisions.

2022 saw increases to the Dental fee guides far higher than historical averages. Unfortunately, it appears that the Dental Fee Guide increases for 2023 will once again be much higher than usual, with 8.5% for Ontario and 9.8% for Quebec already reported. With costs for practitioners and other insured expenses also rising, we anticipate larger than typical increases to claims across plans.

 

Federal Dental Plan

The Federal Dental Plan was rolled out the end of 2022. Employers had many questions on this program, wondering the impact to their Employer-sponsored insured dental plans. Generally speaking, there is little or no impact on existing plans, due to the qualification parameters for the new Federal plan.

The program provides coverage for children under 12 only. In order to qualify for any level of coverage, family income must be under $90K, and the children must not have access to private dental coverage (i.e. Employer plans). The government states that this is the first stage in developing a more comprehensive federal dental plan; only time will tell!

 

Change to EI Sickness Benefits

Effective for December 18th, 2022, the Federal Government announced a change to EI Sickness benefits, extending the duration of pay from 15 weeks to 26 weeks. Employers had many questions about this and the impact on their insured Long Term Disability programs which typically begin at week 17, at the expiration of EI Sickness payments.

In short, Employers are not required to adjust their LTD plans. Generally speaking, it is not in the best interest of those who are insured under LTD plans to remain on EI Sickness rather than transitioning to LTD. 

top benefits3

Flexibility in Benefits

 
Finishing up the list, an underlying theme to benefits conversations in 2022 was the desire for flexibility and customization. As we know, one size does not fit all when it comes to benefit plans, which these days must include elements of flexibility to ensure everyone’s needs are met. We saw employers embracing customized work arrangements including hybrid work models and four-day work weeks.

From a product standpoint, the Immix Group set up more Health & Wellness Spending Accounts than ever before as Employers sought a simple way to provide spending flexibility to their team.

As always, we are happy to discuss your program with you!

Please reach out to us to discuss how we can help with your program; we love to hear from you.

 

Read more:

 

Labour Shortage Stats Can:

https://www.statcan.gc.ca/en/subjects-start/labour_/labour-shortage-trends-canada

 

Retirement:

https://www.theglobeandmail.com/business/commentary/article-the-great-resignation-has-arrived-in-canada/

https://thehub.ca/2022-09-20/trevor-tombe-canadas-not-so-great-resignation-its-retirements-we-should-really-be-worried-about/

https://www.benefitscanada.com/benefits/health-wellness/how-can-employers-turn-the-great-resignation-tide/

 

Hybrid Work:

https://www.benefitscanada.com/news/bencan/survey-finds-78-of-canadian-employees-prefer-working-from-home/

https://www.benefitscanada.com/news/bencan/61-of-canadian-employers-using-hybrid-work-model-survey/

https://immixgroup.ca/blog/index.php/2022/03/23/the-hybrid-work-model-is-working-from-home-an-employee-benefit-2022/

https://immixgroup.ca/blog/index.php/2022/04/19/part-2-the-hybrid-work-model-is-working-from-home-an-employee-benefit/

 

Inflation:

https://www150.statcan.gc.ca/n1/en/catalogue/62F0014M2022014

https://www.sunlife.ca/workplace/en/group-benefits/focus-updates/over-50-employees/provincial-dental-fee-increases-for-2022/

8 Reasons for Increases to your Employee Benefit Plan Premiums    – Latest News from Immix Group

 

Mental Health:

More than a third of disability claims in 2022 due to mental-health reasons: survey | Benefits Canada.com

Mental health claims soar by 75 per cent | Canadian HR Reporter

https://www.benefitscanada.com/benefits/health-wellness/hybrid-work-four-day-workweek-shaping-employee-well-being-expert/

https://www.benefitscanada.com/benefits/health-wellness/2022-healthy-outcomes-conference-centering-employee-well-being-in-return-to-office-plans/

 

Flexibility in Benefits:

One size fits all? Not when it comes to employee benefits. – Latest News from Immix Group

Lindsay Byrka

Lindsay Byrka BA, BEd, CFP

Vice President, Immix Group: An Employee Benefits Company
A Suite 450 – 888 Dunsmuir St. Vancouver V6C 3K4
O  604-688-5262 

E lindsay@immixgroup.ca
W www.immixgroup.ca

At Immix, our role goes far beyond the pricing of your program.

 

From time to time, we are approached by businesses that do not have an employee benefits program in place. Or, they have a plan, but they do not have an active relationship with their benefits broker. Surprisingly to us, they sometimes don’t know their broker at all!

At Immix, our relationship with our clients is very different. Unlike many brokers, our role as your benefits broker goes far beyond pricing. We like to say that we consider ourselves an extension of your HR Department- and your partner- in managing your benefits program.

In this article, I will give some insight into how Immix adds significant value for our clients with the support we provide.

 

Experience and advice

What are other employers like us doing for their employees
We are asked this every day! Firstly, we know what’s happening out there in the benefits marketplace. That’s because benefits are our focus at Immix: all day, every day. We not only have access to industry information, reporting and benchmarking tools; we have in-depth experience and solid relationships that keep us on the pulse of our industry. This means we know what you need to do to be competitive when it comes to your benefits offering.

In short, we are the experts, so you don’t have to be.

 

Financial expertise & transparency

I don’t understand my benefits plan pricing, can you explain it to me? 

Unfortunately, when people think of a benefits broker they, might just think of the messenger who delivers rate increases year after year. At Immix Group, we are not just handing over the pricing as set by the insurance company.

Because of the volume of clients with whom we work, our role is not limited to presenting you with the renewal document and pricing as determined by the insurance carrier. We are intricately involved in setting our own pricing and negotiating fair and sustainable rates. We want to ensure that you understand how the demographics, usage and other factors impact the pricing of the plan.

Some of our clients want to know all the details, and other are happy just to see a rate decrease with no questions asked! 

Whatever your level of interest in the financial details of the program, our point is that as your broker, we understand and wherever possible, keep your pricing fair and sustainable. 



Giving you the latest benefits news – accurately

Our clients continuously ask us about things seen or heard in the media. We’re glad you ask! In both print and broadcast, news stories often announce trends, changes, opportunities or products in such a way that can be very misleading. We want to give you accuracy instead.

For example, people hear regularly about “flex plans” and “pools” and “health spending accounts.” And of course, they hear continuously about how they can save money!

The “million-dollar baby” case is a typical example of a story that garners a ton of media attention and acts to unduly alarm people. In this case, a Canadian woman gave birth unexpectedly early while traveling in the United States, only to find she wasn’t covered under her travel insurance. The enormous hospital bill was nearly $1M.

Without a doubt, one of the biggest concerns for our clients is whether they’re covered when they travel. Could this happen to other pregnant women while travelling? Sure it could. But the situation wasn’t as simple as presented by the media. The details that you may not have heard make all the difference!

Is it worth looking into all the things the media proclaims? Absolutely. We can help you sort through the hype and rumour and ensure you understand the facts behind the headlines.

 

Still more ways we keep you up to date and fully informed:

The fine print
When was the last time you read your inch-thick Long-Term Disability contract? If your answer is never, you’re probably in the majority! At Immix our job is to understand your contracts and interpret them to you in plain, concise language. That way, you can skip confusing, unnecessary wordiness and rest assured that you’re taking care of your most important asset – your employees!

Uncommon employee situations 
Not sure how to approach a leave of absence, potential disability situation, maternity leave or some other employee matter? Don’t worry. No matter what the issue, chances are, we’ve dealt with a similar situation many times before! Let us help you out with whatever arises so you can ensure you’re protecting both your rights as an employer and the rights of your employees.

Educating employees about group benefits
We’re happy to help you organize and deliver staff education sessions on the group benefits program. From our perspective, it’s essential –and helpful to everyone, employees and employer alike – to promote understanding of the coverage.

 

Your staff will appreciate the value of:

  1. the plan you have taken so much consideration in implementing
  2. the programs and services available to help keep them healthy, and
  3. the opportunity to ask questions.

Added bonuses: highlighting the perks and discount programs, as well as the technological advancements that making claiming so easy!

At the end of the day, a well-thought-out benefits program works to keep your team healthy and engaged. And healthy employees are more productive, long-term employees.

Daily administrative support
Immix is here for you all the time. We are equipped to manage the daily administration of your program on your behalf. For example, just pop us an email and we can add, terminate or change an employee’s coverage.

Or maybe you would usually prefer to do this yourself, but you’re heading out on vacation or swamped in a particularly busy work time. Again, no problem. We’re happy to administer your program for you at any level that works best for you.

Representing you, to your insurer
Most importantly, remember that as your broker, we work for you!

Maybe you forgot to enrol an employee on time, or you need a special exception made because of an unusual situation. Or, a situation may arise where you as the employer firmly disagree with the insurance companies handling of a situation. 

This is where we come in- we know how to handle these situations to get the best outcome.

We have your best interests in mind.  Rather than going straight to the insurer, we want you to come to us with your questions and concerns. We work on behalf of our clients and in your best interest in dealing with the insurance carriers that underwrite and administer your programs.

 

Our role as your broker goes far beyond the pricing of the plan!

We are the benefits experts so that you don’t have to be. We partner with you and work with the insurance companies on your behalf with your best interests in mind.

Lindsay Byrka

Lindsay Byrka BA, BEd, CFP

Vice President, Immix Group: An Employee Benefits Company
A Suite 450 – 888 Dunsmuir St. Vancouver V6C 3K4
O  604-688-5262 

E lindsay@immixgroup.ca
W www.immixgroup.ca

Affordable and innovatively structured employee benefit programs