6 Reasons Why It’s Important To Ask About A Pension Plan When You're Job-Hunting In Ontario
It's never too early to invest in your future.
When seeking out a new job opportunity, comparing your potential benefits packages is crucial. For some, a remote-work model and dental coverage are not negotiable, while for others, a higher wage beats out discounted gym memberships.
Though these perks matter and play a role in cultivating work-life balance, an often overlooked but highly valuable benefit is the employer pension plan.
While retirement may seem far away, it's never too early to set yourself up with a financially-secure future. And here are six reasons why putting a pension and retirement savings plan at the top of your benefits wishlist is a smart move.
You can get more money with employer co-contributions
One of the biggest perks of getting a job with a pension or retirement savings plan is that your employer could reward you by matching what you're contributing, essentially doubling your money.
Once you find an employer with a pension or retirement savings plan, ask them if they offer co-contribution. Besides helping you build funds quicker, who can say no to free money?
You get the freedom to choose how & when you retire
Having a solid figure in your pension fund means you have the option to retire early. If you're within the 10 years of the retirement age specified in your plan, you can take steps towards the next phase of your life (like travelling, part-time work or going all-in on a hobby) with the confidence that you're in a good financial place.
If you're in your twenties and like the sound of that kind of freedom in your future, it may be helpful to get a job that can set you up with a pension or retirement savings plan now.
You can start earning that sweet compound interest
You often hear that kick-starting your retirement savings early is key, and a big factor in this is compound interest.
Compound interest is earned on the interest you've already been paid, and the longer you leave your money invested, the greater the payoff. Employer pension plans can help you build retirement savings, but you need to get started ASAP if you want to reap the most benefits.
You can have income secured for life
William Fortunato | PexelsWilliam Fortunato | Pexels
For some, thinking about the future is a stressful mess, with money being a central worry point. You can ease some of that stress by ensuring that you and your family are set up for a healthy financial future.This is where pension plans come in. When that fear of the future comes up, you can breathe easy knowing you've already taken a step towards creating a solid financial plan in retirement.
Your money is safe, even from you
Depending on the plan your job sets you up with, withdrawing money from your pension for anything other than retirement isn't usually possible.
This is part of the reason why pension plans are so effective. If you tend to make hasty financial choices, this will help protect your money until you really need it.
You'll be glad to have the extra income
Think of your pension plan as not only a headstart but also as an additional stream of income on top of your government benefits.Once you retire or are over 65, you're entitled to funds through the Canada Pension Plan and Old Age Security. If you have an employer pension plan in place, it will complement these payments, making you even more financially secure.
Seeking out a workplace that offers a pension or retirement savings plan may not be topping your list right now, but the benefits can continue to pay off well after retirement.
February 16 is Pension Awareness Day, and the Financial Services Regulatory Authority of Ontario (FSRA) wants to encourage Canadians to keep pension plans in mind when they're hunting for their next role.
Though they may feel light-years away, preparing for your golden years is one of the best things you can do as a young person. When you're retired, sitting on a beach sipping your umbrella-straw drink in 30 years, you will be glad you did.
This content is for general informational purposes only and does not constitute financial, investment, legal, tax or accounting advice.