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Originally Posted by Red
That system is just like our CPP then, no? Or is that on top of a state pension?
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It's different than CPP. I believe it's on top of whatever the Australian version of the CPP is but since I'm not paying into whatever that is I'm not sure.
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And if it is like our RRSP how do they manage any losses that may occur due to bad investments?
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The investor, ie employee, gets to choose which fund the money goes into. Just like a RRSP, if there are losses you lose. The positive, though, is that there is a guarantee of continued investment of at least 9% into various Super funds in the country as long as people are employed, so the funds tend to be a little more stable.
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To OPs point, I don't believe maxing it is the best way to invest as it will be taxed as income later on. Balance it with other investments.
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I agree with this. My wife and I would do a calculation to determine the amount of RRSP contribution that would ensure us the largest proportional tax return. That way, we contributed a good amount to RRSPs and also got a signifcant amount back in taxes which lessened the pain of contributing a large amount to RRSPs. There's a bit of a sweet spot to find assuming that you are relatively young and not in a hurry to retire.