Pensions / RRSP's

[Speed_69]

I contribute to my pension plan at work on every one of my paycheques. I contribute 6% of my salary and my company contributes 7% of my salary. Wondering if I should be starting an RRSP account as well? Which one would be better for me?

I am 22 years old and keep in mind that I would like to like to purchase a home/condo of my own within the next two or three years. I do not want to be taking money out of these funds to purchase my home/condo and then having to re-contribute to them within x amount of years. I have also started a Tax-Free savings account but have already contributed the maximum of $5000 for this year.

Can someone explain to me the big differences between Pensions and RRSP's? Any good websites someone can refer me to?

[TYMSMNY]

Contributions from a company can really depend on how it's set up.

Pensions are usually locked-in a RPP or DPSP plan in which holds the employers contributions. These funds are automatically locked into a LRSP (Locked in retirement savings plan) once you leave the company. You can neither withdraw nor contribute until you reach that magical age where you can withdraw portions of it based on a formula.

The portion that you contribute would go into a regular RRSP. You can contribute or withdraw these funds. If this is your first home/condo, you can utilize the HBP, home buyers plan and withdraw up to $20,000 and repay it over x year. But this is not a route you wanted to take.

In this case, just hold the money in a regular savings account or have it in a bond/gic/h.interest saving till your ready to purchase your home. The money for a down payment should be protected from risk so that's why the bond/gic/high interest savings account.

In sum, pensions are locked in... untouchable, but the funds can be invested in almost anything a RRSP can.

RRSPs can be taken out but will be taxed as income.

[Xtrema]

Pension plan will usually affect your RRSP limit. Check with your HR.