How much money is in your 401 (k) or similar DC plan?

[Admiral Yi]

There is also Old Age Pension which pays to everyone independently of contributions, is there not ?

When my Dad retired, he was getting about $600 in CPP benefits, my Mom, who had only worked a couple of years for pay, got about $1. Howver both got OAP which iirc was about $500-$600 each. Together this allowed them to live comfortably and even travel a bit given that their home was paid for.

The Baldwins will be OK.

[Jacob]

So do Canadian employers typically make no contribution to employee retirement?  Jacob in another thread said defined benefit plans were atypical, like the US.

Bigger companies often have a matching contribution type of dea. Say, they may match your contribution up to 4% of your salary, or they may match double your contribution up to 5%, or whatever - it varies from company to company, and not all of them do it. I'm not sure what the implication is on the employer side.

[Malthus]

So do Canadian employers typically make no contribution to employee retirement?  Jacob in another thread said defined benefit plans were atypical, like the US.

Bigger companies often have a matching contribution type of dea. Say, they may match your contribution up to 4% of your salary, or they may match double your contribution up to 5%, or whatever - it varies from company to company, and not all of them do it. I'm not sure what the implication is on the employer side.

From what I've read, unless I'm wrong, this doesn't actually increase the employee's maximum contribution limit, while in the US employer contributions appear (again I could be wrong) to be on top of what an employee can contribute.

[Admiral Yi]

I think the biggest difference between the US and Canada, if your information about the rarity of matching is correct, is that the match is a huge incentive to put your own money in a 401.

[Jacob]

http://business.financialpost.com/2013/02/20/business-leaders-offer-solutions-to-chronic-pension-shortfalls/

Interesting article - I wouldn't have expected someone like Mr. Goldring and Mr. McCaughey to advocate expanding the CPP and savings, giving they are in the money management business themselves.

[Jacob]

From what I've read, unless I'm wrong, this doesn't actually increase the employee's maximum contribution limit, while in the US employer contributions appear (again I could be wrong) to be on top of what an employee can contribute.

Hmm...  I don't remember, to be honest. However, even if it doesn't it still encourages you to put the maximum possible into your RRSP account every year (and for many the wisdom to do that is still missing from their basic financial education).

[mongers]

Finally an OP Martinus would approve of. 

[Baron von Schtinkenbutt]

Wow, even here my retirement pile is in the top 50% already.

[Ed Anger]

I am no longer gonna wave my dick in these type of threads.

:smug:

[11B4V]

I dont know but I just up it. Not 401k but TSP. *shrugs*

[OttoVonBismarck]

There are two other common ways I've seen on top of tax-deferred plans, a lot of companies have stock option plans for all their regular employees. Basically a share of your income goes into an account and usually quarterly you accrue option benefits. It varies wildly from company to company but often times it's something like, "after x number of years of holding these options you can exercise them for a 10-15% discount to market price." So at the end of your time at a company you can actually buy a large amount of shares at a discount to the present market price (and then immediately sell them for profit on top of whatever increase in value your company has had over your career.)

Some are even more generous, I've seen them written such that you can actually be entitled to buy your shares at a 15% discount to the lowest price in the past 12 months and then the company will buy them back from you (if you choose) at the highest price the stock has closed at in the past 12 months. So basically you get to buy at a guaranteed discount to the lowest share price over the past year, and sell back at the highest price in the past year. Or you can just hold your shares.

The second are these plans called "cash balance" plans. A cash balance can be sweeter than a regular 401k but usually not as sweet as the really good old school largesse pensions. Best explained here.

[Jacob]

Does the US military get DB pensions?

[OttoVonBismarck]

Also, with IRAs, if you go self directed the sky is really the limit to what you can do. You can start a real estate business inside your IRA and all your income can accrue as retained earnings of your company, which bloats up the value of your IRA. You can also incorporate yourself as LLC, and then put ownership of the LLC into your IRA and say you run a consulting business on the side or for a few years after retiring from your career but before "real" retirement. You can put all your consulting income and hold it in your company, which is inside your IRA.

[Jacob]

... anyhow, I aspire to get the kind of personal DB pension like the one gentleman who was calling my wife about a missing couple of hundred bucks lost from some minor US-Canadian tax thing. He had been drawing $70K/month since he retired in the mid 80s... well, from this one pension at least. He probably had some other pensions kicking around somewhere.

That's not going to happen with RRSPs (or 401(k)s for that matter). I think that requires being an executive of a well capitalized major company.

[Admiral Yi]

There are two other common ways I've seen on top of tax-deferred plans, a lot of companies have stock option plans for all their regular employees. Basically a share of your income goes into an account and usually quarterly you accrue option benefits. It varies wildly from company to company but often times it's something like, "after x number of years of holding these options you can exercise them for a 10-15% discount to market price." So at the end of your time at a company you can actually buy a large amount of shares at a discount to the present market price (and then immediately sell them for profit on top of whatever increase in value your company has had over your career.)

Some are even more generous, I've seen them written such that you can actually be entitled to buy your shares at a 15% discount to the lowest price in the past 12 months and then the company will buy them back from you (if you choose) at the highest price the stock has closed at in the past 12 months. So basically you get to buy at a guaranteed discount to the lowest share price over the past year, and sell back at the highest price in the past year. Or you can just hold your shares.

The second are these plans called "cash balance" plans. A cash balance can be sweeter than a regular 401k but usually not as sweet as the really good old school largesse pensions. Best explained here.

I participate in the Pearson stock purchase plan, and a couple of details are off.

I don't have to wait X years to buy stock; I set aside a fixed amount from each pay check and bi-annually it buys shares (actually ADRs since the company is listed in London).  The discount is 15% relative to the market price at the beginning or end of the 6 month period, whichever is lower.  Pearson won't buy them back.  I can sell them on the open market, but I have to hold them for at least 2 years or that 15% discount gets treated as taxable income.