Invest in company RRSP or open separate RRSP

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asked May 16, 2016 11:18 AM by
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Good morning!

I am a newbie to this site and have only moderate (at best) investment knowledge. My question is this: I work for a company that got acquired by Sun Life last year. Of course all our RRSP funds that we can buy are Sun Life products. I am currently investing in the " SLF Granite Mod 2030 Fund " from Sun Life with a MET (for Sun Life employees) of 0.8%.

The fund performance is (I hope the table show nicely just as I put it in here...):

Calendar Year Total Returns 2010 2011 2012 2013 2014 2015 YTD Fund 10.55 -3.01 11.96 18.85 12.08 8.27 -0.76 Bmark 8.24 -1.58 9.86 15.74 11.46 7.54 -0.43 +/- Bmk 2.31 -1.42 2.10 3.11 0.61 0.73 -0.33

The deal is that I need to invest 2% of my gross salary so that I get the full 4% company matching.

Now my question is: should I just invest any additional funds with my employer or should I open an RRSP with Questrade and follow the "Regular Portfolio" approach?

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answered May 16, 2016 12:34 PM by
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Usually employers would match employees contributions in RRSP Employer funds.

If this is your case, then I would suggest investing in your employer RRSP plan.

May be the fund will perform lower than other ETF or regular funds, but since your employer contributes with you then your performance vs amount invested would be better

Hope this helps!

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Yes, my employer contributes, but only up to 2% of my base salary (they put 4% on top of it). So I only need to contribute 2% to get the full employer matching. But I want to save more, so I am thinking about putting that money in a separate RRSP.

HelmutD ( May 17, 2016 11:51 AM )edit
answered May 16, 2016 12:53 PM by
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Thanks for your comments. Let me rephrase my question: I will definitely invest 2% of my gross income to get the full 4% matching from my employer.

But I could save another 6% of my gross income. If I put that into the company plan, no more additional matching will occur. So I could as well invest it in another RRSP. I opened an account with Questrade and am thinking of putting those additional 6% into the regular portfolio.

That brings up a very basic question: e.g. I will contribute $300 each pay cheque to the Questrade RRSP. Is there any way that I can buy respective numbers of the different ETFs according to the precentages in the portfolio? Or should I save the RRSP contributions up to e.g. $2400 (i.e. 8 pay cheques = quarterly) and buy the funds then?

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I watched the video and can't find that page anymore that gives you the allocation for th eportfolio based on an amount that you want to invest. I am basically looking for that page... ;-)

HelmutD ( May 16, 2016 01:08 PM )edit

I would recommend contributing on a specific frequency (every quarter) and leverage on this contribution to rebalance Some people would suggest to cumulate and wait for the good momentum to buy. However, if we can predict the good momentum then many of us would have become millionaires by now.

Just Trade ( May 16, 2016 03:12 PM )edit

As a rule, I would personally hold off on contributing anything less than say $1,000 because the transaction costs would be too high.

Jin Choi ( May 16, 2016 08:49 PM )edit
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