Registered Retirement Savings Plan (RRSP)
An RRSP is a retirement investment plan that you establish where you, your spouse or common-law partner can contribute. RRSP contributions are deductible against your income and can be used to reduce your tax. Any growth you earn in the RRSP is exempt from tax as long as the funds remain in the plan. When you receive payments from the plan the payments are considered income in the year in which they are taken and are 100% taxable.
General Information
Making your retirement dreams come true doesn’t just happen. You need to plan and save for them. Putting money into your new Providence Care Centre Registered Retirement Savings Plan (RRSP) is one of the easiest ways to do this.
Benefits of this RRSP include:
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Tax deductible contributions
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No tax on investments
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Unused contribution room carries forward
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Investment management fees typically lower than you’d pay as an individual investor
What is a Group RRSP - A Group RRSP is like a traditional RRSP but with convenience and advantages that come from providing a service to a large group of people. These advantages include:
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Simple payroll deduction
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Access to a large selection of investment funds from a wide variety of managers
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Lower fees than traditional investment advisors
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Access to a team of specialists at Manulife for assistance with onboarding and investment selection
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Management and planning services from Income First Financial when it comes time to plan your retirement.
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How Much is Too Much to Deposit - The key to using RRSPs is to be in a lower tax bracket when you withdrawal the money than you were when you deposited it. It doesn't make sense to pay 35% tax on the money you take out of an RRSP in retirement if you only saved 25% in taxes on the money when you deposited it while you were working.
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Reduced Fees in Group RRSP Plans - Everyone wants the most they can get for their money. Due to the volume of individuals and assets invested, employees who participate in a Group RRSP are able to access traditional investment funds at a reduced money management fee, to that from most traditional advisors. The reduction in the fee you pay, increases your long term return.
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The Power of Payroll Deduction - Payroll deduction let's you save what you want while having more spending money each month.
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The example below assumes you have an income of $4,000 a month, are an Ontario resident, and want to make a contribution of $300 into your RRSP each month. By making payroll contributions before tax, you would receive an instant tax refund of $88.95 dollars a month. This means your money is invested for you throughout the year as opposed to giving the government an interest free loan.
Savings will vary depending on the income and tax rate.
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Traditional RRSP
Monthly income $4,000
Payroll deduction RRSP $0
Tax payable (@29.65%) $1,186
After tax income $2,814
Regular RRSP deposit $300
Money left each month $2,514
Payroll Deduction RRSP
Monthly income $4,000
Payroll deduction RRSP $300
Tax payable (@29.65%) $1,097.05
After tax income $2,602.95
Regular RRSP deposit $0
Money left each month $2,602.95
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With the Payroll Deducted RRSP you get to use the $88.95 in tax savings each month instead of loaning that money to the government and waiting until April of next year to get it back (without interest).
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Helpful Links:
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How to Enroll
To enroll in the Providence Care Group RRSP you will need to access the Group RRSP portal Link: https://manulifeplan.ca/2956prorrsptfsa#home
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The Portal Link will allow you to do the following:
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Access plan details and learn about your plan
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Learn more about the investment options available to you
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Gain access to the Resources section where you can plan, learn and invest
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Find contact information for Manulife's member care team
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and finally, select "I am ready to join" or Get started" to join the program a work through the e-enrollment process
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The Enrollment Process will help you know how, why and how much to invest by giving you access to:
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An Investor Strategy Worksheet
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A Financial Wellness Assessment
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Calculators and other tools
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Articles on tax and other related topics
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and a Frequently Asked Questions (FAQ) section
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Already have a RRSP or TFSA account with another financial institution?
No problem. It’s easy to transfer it to this new RRSP and TFSA with Manulife.
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Looking for personal financial planning advice?
At no cost to you, a Manulife PlanRight® Advisor can help you optimize your savings in the Group Retirement Savings Plan for the employees of Providence Care Centre to ensure you’re participating in a way that supports your retirement goal. An Advisor can also help you look at your broader financial picture, including personal financial plans and insurance options, as well as offer financial planning expertise and services beyond the Providence Care Centre Group Retirement Savings plan.
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Providence Care Centre and Manulife encourage you to take an active role in managing your retirement savings and making informed decisions about your finances. A PlanRight® Advisor can help you make financial decisions with confidence. To schedule a meeting with a PlanRight® Advisor, email PlanRight@manulife.ca or call 1-877-371-6268 between 9 a.m. and 5 p.m. EST.
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Questions?
Contact Manulife from Monday to Friday, 8 a.m. to 8 p.m ET.
Call 1-888-727-7766 or email gromail@manulife.ca
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