Retirement benefits

A retirement plan or a pension is an arrangement by an employer to provide

their employees with an income when they are no longer earning a regular
income from working. Retirement plans may be set up by in a variety of ways
but typically will have a form of a guaranteed payment. Often retirement plans
require both the employer and employee to contribute money into a fund
while employed so that they will receive benefits upon retirement. Pension
plans are considered a form of delayed income.

Pension Plans
Pension plans are usually classified as either defined benefit or defined
contribution according to how the payments are determined.

A defined benefit plan guarantees a predictable monthly payment at

retirement, calculated by using an established formula with some
combination of the employees salary, years of service and/or age.
A defined contribution plan will provide a payment/payout at retirement
that will be determined by the amount of money contributed during the life
of the plan and the performance of the stock or investments used.

Registered Retirement Savings Plans

A Registered Retirement Savings Plan or RRSP is an account that
provides tax benefits for saving for retirement yet is not necessarily based on
the employer/employee relationship. RRSPs can provide ways to save money
for retirement and defer and reduce taxes because:
Contributions to RRSPs, up to established limits, may be deducted from
income in pre-taxed dollars.
Income earned within the account is not taxed until money is withdrawn
from the plan.
RRSP accounts can be setup with as either:

Individual RRSP
An Individual RRSP is associated with only a single individual; only they
contribute money to their RRSP.
Spousal RRSP
The spouse of the contributor is actually the account holder. A spousal
RRSP is a means of splitting income in retirement.
Group RRSP
An employer can arrange for employees to make contributions through a
schedule of regular payroll deductions. In many organizations RRSP
contributions can be based on a matching program. This means that the
employer will put in a certain percentage or dollar amount based on the
contributions the employee makes
The employee gets to receive the tax savings immediately at the time of
deduction instead of having to wait until the end of the tax year.