Yes, its late. I’m not that creative when I’m fully awake. Writing after midnight could prove disastrous.
So moving beyond pooing robots, Group Registered Retirement Savings Plans (GRRSP) are sponsored by employers. They are similar to RRSPs, but are administered by the employer. The great thing about these plans is that the contributions are made through deductions in your payroll. Ahhh! Less money from your paycheque! How is that a good thing? But it is good because this is one less thing you have to think about. Forced savings. I ❤ it. I’ve had lots of questions on these plans, usually referred to as that thingy that my employer has that I contribute to for retirement. I think. Anyways, if you are fortunate enough to have an employer who provides this, this is a great Level 4: Investment cheat.
How much should I contribute?
If your employer provides a match, contribute enough to get the full match. This is FREE MONEY that your employer IS THROWING AT YOU. If you need to contribute 4% to get a 4% match, contribute the FULL 4%. Think of it as an instant 4% pay raise, just for being you! Or, put another way, it is a 100% return on your money. Hard to beat that, I assure you.
What should I invest in?
Once you move beyond the initial procrastination and actually sign up, choosing your fund allocation could prove to be the next big deterrent. I’ve heard of people randomly choosing a selection of funds from the list that the employer provides. Eeny Meeny Miny Moe. Spell check that all you want; Wikipedia says its right. Although this could prove to be entertaining, some may prefer a more systematic approach on selecting your investment allocation.
Step 1: Take your age (yes, your actual age, pretending is going to hurt no one but you). This is going to be your bond or fixed income portion. If your employer has a decent administrator, the list of similar types of funds should be grouped together. Go to the bond or fixed income section, and select the Canadian fund with the LOWEST MER. We all know why this is important. The one crappy thing about GRRSP is that you don’t have a choice on the selection of funds, although I have seen plans that provide index mutual funds selection. That alone was almost enough for me to want a job there. Almost. Or, you can make it your sole mission to advocate your employer to provide index mutual fund options. Those who complains the most and the loudest, wins. Those in the corporate world know what I’m talking about.
Step 2: Subtract your age from 100. Take this number and divide it by 3. Bear with me, this elementary math will soon be over. This number is going to be your allocation for your equities portion, and it will be split evenly amongst Canadian equities, US equities, and International equities. Once again, always look for the fund with the LOWEST MER.
That’s it. Take 5 minutes, sign up, and you will be well on your way towards a comfortable retirement.
As a recap, I’m 30. My portfolio is going to look like this:
24% Canadian equities
23% US equities
23% International equities
30% Canadian bonds/fixed income
Yes, I rounded up my Canadian equities so it adds to 100%. Yes, if your age doesn’t result in even numbers, you will have to do this.
How many of you have GRRSP? Are index mutual funds more common now than before? How many of you have these provided but are not a participant? If you are participating, are you maxing out the employer match?
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Vix's Money 
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