Quote:
Originally Posted by opendoor
On the other hand, with RRSP matching or other employer non-pension plan retirement contributions, the money is actually yours. If someone on a pension dies early, their money funds other pension members. Whereas if someone with an RRSP dies, their heirs get it.
And it can be a considerable amount of money. I've done the math for BC, and if a teacher contributed their normal amount to an RRSP for the last 30 years and the employer matched even just 4%, they'd have about $1.3-1.4M in retirement savings with an equity/bond mix.
No, it doesn't have quite the security of a defined benefit pension (though you could probably pull out $40-50K a year inflation adjusted without any worry), but it's also a life-changing amount of money for your heirs if you happen to die earlier than normal.
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This is the age-old debate between DC/DB though. You can't outlive the DB pension, which is the primary concern people have when they are retiring or near retirement. "Will I have enough money" is the most asked question I get, hands down.
And while people hate the aspect that they've contributed for decades, potentially die, and the money is gone (save for a spousal pension), that security is enormous. It's a tradeoff between longevity risk and market risk, essentially.