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September 28, 2021

Psst: Want to earn a sure 50% on your money?

While "Earn 50% On Your Money!" may be a tag line you'd expect to see in the back pages of magazines your mother told you not to read, it actually has a ring of truth.

Ad At least it does for those who take part in pension or RRSP contribution matching programs set up by their employers.

Many employers offer a subsidized RRSP program, meaning they will match employee contributions up to a certain dollar or percentage limit, ranging anywhere from 25% to 100%, depending on how long you've worked there.

Talk about free money. Not signing up is akin to simply leaving some of your salary on the table every month. Nonetheless, industry figures suggest that roughly 40% of eligible employees simply never get around to participating.

Look at it this way: If your boss came to you and said, "I want to give you a 3 or 4% raise," would you turn it down? I doubt it.

The biggest hurdle to overcome is usually the plan's complexity, of course. New hires are often handed an intimidating package from HR that then refers them to an opaque third-party website. In other words, you're expected to figure things out yourself.

But those subsequent investment decisions have nothing to do with whether you should sign up or not once you're eligible. Sure, the fund fees can be pretty high but you're still accessing money that you wouldn't otherwise see.

Or is simply that you don't trust the folks you work for?

Do you have an RRSP matching program where you work? Are you in? If not, why not?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...