It's that time of year again, I'm afraid. It's time to talk about retirement planning. If you recall, last week I talked about not overdoing your contributions to the retirement plan, but to put something aside to pay off your mortgage and enjoy a thing or two in life as well. But, when there is free money on the table for your retirement, there is simply no excuse not to take it.

So, who gives you this "free money?" Well, that would be your employer, but you have to do your bit first. Here's how...

Many Canadian employers offer group retirement plans as part of their benefits package. Employees have an option to participate in them through automatic payroll contributions, with employers matching employee contributions anywhere from 25% to 150%. Both my husband and I are lucky to have employers that offer such benefits. In my case, the top up, or, as I like to call it, the free money, is 100%. In my husband's case, it is 125%.

Oddly, many Canadians are not taking advantage of these benefits. They are literally walking away from thousands of dollars they could be stashing away for their retirement, and, in the process, they are also crippling their overall returns. Excuses vary, from not having enough disposable income at certain stages in life to laboring under an impression that group pensions often offer mediocre returns.

Here is my personal take on this. My husband is the one with a good head for personal finance in our household, although, ironically, I am the one with credentials and experience in managing money. Still, he was the one who got us out of the "we're too young to think about life insurance and retirement planning" loop a few years ago, and he was the one who put us on track in resolving the basics of life, such as almost paying off our house and maximizing our RRSPs to the allowable limit. At times, I thought he was out of his mind, since such fast-tracked saving also restricted our spending, much to my detriment.

I have to admit that we clashed horns quite a few times. My argument was that now is the time to enjoy life, not when we are too old. His argument was that life needs to be enjoyed for many years to come, not just now. Thankfully, since I had a distinct feeling I couldn't win the argument, there were options to increase our RRSP contributions with help of our employers and we both made sure to take full advantage of these benefits.

Just to give you an idea of what you might be missing, in my husband's case, his employer matches his 10% payroll contribution at a 125% rate. He is invested in a basket of diversified mutual funds, with allocations of 5% in money market, 20% in Canadian bond funds, 25% in Canadian balanced equity mutual funds, 25% in Canadian growth equity funds, and final 25% in foreign equity mutual funds. So far, his group pension plan has generated a return of over 36%. Now, if this is a mediocre return, then I don't know what a good return is...

Look into what your employer offers in terms of group RRSPs. You don't want to be turning down free money for any reason.