Personal Finance

Does it make sense to put in money if your income is under 40k?

  • Last Updated:
  • Jan 10th, 2019 6:34 pm
Deal Fanatic
Feb 15, 2006
8330 posts
2612 upvotes
Toronto
orianna wrote:
Jan 10th, 2019 11:32 am
I"m wrong? Like the above poster said it's more common these days. This isn't the 80's anymore buddy. Unless you work for a federal or provincial body, companies do not typically offer pensions over RRSP matching. Pension plans are outdated.

I'm not talking about people who work at restaurants and mcdonalds. Corporate jobs in Canada typically offer RRSP matching.
More common for new companies to offer supporting contributing to RRSP, does NOT mean "Most companies offer RRSP matching". There are still a lot of jobs in government and crown corporations, and a lot of non-government companies with pension plans. Many companies are offering Defined contribution plans rather than Defined Benefit plans, but that doesn't mean pension plans are outdated. Just because you don't have a company pension doesn't mean pensions are outdated.

BTW, this is Canada and there is a CPP, a pension plan, whether you think it's outdated or not. This is 2019 buddy.
Sr. Member
Aug 17, 2013
569 posts
413 upvotes
Toronto
Arrgh wrote:
Jan 10th, 2019 12:54 pm
More common for new companies to offer supporting contributing to RRSP, does NOT mean "Most companies offer RRSP matching". There are still a lot of jobs in government and crown corporations, and a lot of non-government companies with pension plans. Many companies are offering Defined contribution plans rather than Defined Benefit plans, but that doesn't mean pension plans are outdated. Just because you don't have a company pension doesn't mean pensions are outdated.

BTW, this is Canada and there is a CPP, a pension plan, whether you think it's outdated or not. This is 2019 buddy.
You cannot read. I said "most companies", Goverment/crown corps are not commercial companies. Yes there are pension plans because they have been installed for a long time for people like you who do not like change.

The cost of running a pension alone is a reason.

https://nationalpost.com/news/canada/ca ... rted-study

Show me companies that offer pension opposed to RRSP matching. Oil/gas companies offer RRSP matching as well as property management companies I was employed.

Show me these new "2019" companies that contribute to a pension plan.
Deal Fanatic
Feb 15, 2006
8330 posts
2612 upvotes
Toronto
orianna wrote:
Jan 10th, 2019 1:03 pm
You cannot read. I said "most companies", Goverment/crown corps are not commercial companies. Yes there are pension plans because they have been installed for a long time for people like you who do not like change.

The cost of running a pension alone is a reason.

https://nationalpost.com/news/canada/ca ... rted-study

Show me companies that offer pension opposed to RRSP matching. Oil/gas companies offer RRSP matching as well as property management companies I was employed.

Show me these new "2019" companies that contribute to a pension plan.
You said pension plans are outdated, then try to use an article about CPP costs to justify your view?

Just because newer companies have RRSP matching, does not mean "Most companies offer RRSP matching". Big difference between "new" and "most" companies.

When presenting your argument, don't assume, and don't try to put down the other person -- your words" "Yes there are pension plans because they have been installed for a long time for people like you who do not like change" Try to discuss/argue the facts.

Just because you don't have one in the companies you worked, doesn't mean most companies don't have pensions and pensions are outdated.
Deal Addict
Oct 7, 2011
1051 posts
344 upvotes
Toronto
Pensions are not outdated. Many companies still have them and it is an attractive benefit that helps to retain employees.

In fact, I advise many young people it's fine to get jobs with good pay in the beginning, but eventually they need to look at company pension (and health coverage) as an important part of the compensation package for future careers.
Sr. Member
Nov 10, 2003
727 posts
118 upvotes
Concord
taeyang987 wrote:
Jan 9th, 2019 8:05 pm
Does it make sense to put in money if your income is under 40k? If you don't think your income will ever exceed 40k per year does it make sense to not contribute to your rrsp since you are in the lowest tax bracket or should you contribute and withdraw some when you are 65+ and getting cpp/OAS?
It is always good to save a portion of your income as you will get comfortable with putting money aside regardless of how high your income is in the future. This portion should be a % of your income instantly.

Also keep in mind, money takes time to grow. $5k a year doesn't sound like a lot in 5 years but over 30 years, it is plenty.
Sr. Member
Aug 17, 2013
569 posts
413 upvotes
Toronto
Arrgh wrote:
Jan 10th, 2019 1:23 pm
You said pension plans are outdated, then try to use an article about CPP costs to justify your view?

Just because newer companies have RRSP matching, does not mean "Most companies offer RRSP matching". Big difference between "new" and "most" companies.

When presenting your argument, don't assume, and don't try to put down the other person -- your words" "Yes there are pension plans because they have been installed for a long time for people like you who do not like change" Try to discuss/argue the facts.

Just because you don't have one in the companies you worked, doesn't mean most companies don't have pensions and pensions are outdated.
You replied to me, i'm not even arguing, i'm presenting facts.

Name any start ups or companies that contribute to pension plans for their employees? Pension plans can be underfunded easily..... People are worried the CPP won't be there when we retire in 40 years. I don't even want to argue with people like you who argue over something dumb like this, I said most companies, never said all.

I'm still waiting for you to name companies other than crown corps. The majority of Canadians do not work for the public sector. RRSP matching is what the majority of companies are offering to retain their employees. They are not going with a pension plan. If so show me
Deal Fanatic
Feb 15, 2006
8330 posts
2612 upvotes
Toronto
OP, if you have money to put in both TFSA, and then RRSP, certainly do so. When money can grow inside a registered plan and not have to pay tax (for interest, dividend, capital gain), it is a great way to grow money.
orianna wrote:
Jan 10th, 2019 4:00 pm
You replied to me, i'm not even arguing, i'm presenting facts.

Name any start ups or companies that contribute to pension plans for their employees? Pension plans can be underfunded easily.....

I'm still waiting for you to name companies other than crown corps. The majority of Canadians do not work for the public sector. RRSP matching is what the majority of companies are offering to retain their employees. They are not going with a pension plan. If so show me
You keep on trying to change the argument, and instead of the original argument or discussion of "most" companies, you keep on steering to new/startup companies. It's not true that "most" companies offer RRSP matching. New/start (often small) companies cannot fund pension plans, does not mean pension plans are outdated. We are not talking about new or startup companies, they are usually small. We are talking about MOST companies.

As for non-government companies having pension plans, there're lots. Most of the Canadian banks, and there are lots of people working for the banks. Air Canada. Most schools (OTPP is one of the biggest), universities, colleges, etc (lots of people work in education). Hospitals (lots of people work in the medical field). Imperial Oil, Enbridge, Keyera, Desjardin, etc. They are in all sectors of the economy. KPMG, EllisDon, Bayer, Suncor, etc., etc.

One more reminder, because you keep forgetting, "new" (or startup) does not mean "most".
Last edited by Arrgh on Jan 10th, 2019 4:24 pm, edited 1 time in total.
Sr. Member
Aug 17, 2013
569 posts
413 upvotes
Toronto
Cavegirl wrote:
Jan 10th, 2019 2:20 pm
Pensions are not outdated. Many companies still have them and it is an attractive benefit that helps to retain employees.

In fact, I advise many young people it's fine to get jobs with good pay in the beginning, but eventually they need to look at company pension (and health coverage) as an important part of the compensation package for future careers.
Yes it is attractive to employees.. main reason why public sector jobs are appealing because of he DB Pension. They are outdated, as the cost to fund these are higher. Many companies who are grandfathered into old pensions plans which only older employees are still invested in the pension, not newer employees.
Deal Addict
Mar 8, 2013
2386 posts
1110 upvotes
We're talking about contributing to an RSP, right? (RSP is not mentioned in the OP.) Even if you never earn enough to get beyond the first tax bracket (and I'm not sure how you can make that assumption), it is still worthwhile to contribute to an RSP. Starting at age 65, you can claim the 'pension income amount', which is a tax credit currently $2000, against income from a RIF (not CPP or OAS). For someone in the lowest tax bracket, that means that you can get $2000 per year tax free from the contributions that you made to an RSP and converted to a RIF.

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