Status:
| Savings Shortfall | $191,824.00 | ||
| Added Savings | |||
| ESOP Dividends (est) | $18,000.00 | ||
| ESOP Appitional | 50 | 26 | $10,400.00 |
| Shortfall Remaining | $163,424.00 | ||
| Annual addition | $20,428.00 | ||
| Monthly addition | $1,702.33 |
One of the fun parts of working for a corporation is that they support employee share ownership. It comes in various flavours of comapny participation: discounted prices, matching funds, that sort of thing. For me, the company partially matches my contributions and administers the RRSP. The immediate impact for me is that its payroll deduction (before taxes are calculated) and there are no management fees to worry about.
When I did my initial calculations, I didn't include potential dividends. Last night, I pulled up my spreadsheet and added a new tab. The calculations that I used had a lower dividend rate than is currently being paid and assumed a steady share price of the current maximum price over the last year -- think of a pessimistic viewpoint. I also didn't try to include the 2 odd payments that would be made by me during the year (getting paid bi-weekly.
Ran the calculation out over the next eight years and surprised myself. I know that past performance doesn't predict future performance, but the company's been rock steady since I've been here and the real old-timers have said the same thing about their history.
Since I can adjust my contributions on-line, I'm going to ratchet up my contributions by about $50 per pay. The impact on my actual paycheck will be less since the $50 represents pre-tax dollars while my paystub will show a lesser amount. If Ottawa doesn't mind getting less taxes for me saving for retirement, who am I to refuse?
So the impact is about 28 grand, which pulls down my number a bit.
I'm a big fan of schemes like this as the money disappears before you see your pay stub and aren't tempted to spend the money and "replace it someday". My household savings fund operates in the same manner.
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