Mar 23, 2026
When it comes to retirement, many couples are missing out on a simple way to boost their retirement savings — and it boils down to lack of communication and coordination.
While research published in American Economic Review refers to 401(k)s, the American equivalent of Group RRSPs, the underlying issue is universal. The study found that one in five couples could increase their retirement savings by US$750 (C$1,030) annually simply by coordinating who contributes to the 401(k) with the higher employer match rate (1).
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This lack of coordination among couples “is common, costly, persistent over time and cannot be explained by inertia, auto-enrollment or simple heuristics,” according to the study’s authors.
By failing to optimize their retirement contributions, the research found that couples sacrifice an average of US$14,000 (C$19,000) in lifetime retirement wealth, with the top 10% of couples potentially losing up to US$40,000 (C$55,000) (2).
Leaving employer-match money on the table
A Group RRSP is an employer-sponsored retirement vehicle that offers tax-deductible contributions and tax-deferred growth. Contributions are deducted from the employee’s paycheque.
Many Group RRSPs also offer employer matching, typically ranging from 3% to 6%. That means the employer will match the employee’s contributions on a percentage basis, typically between 50% to 100%, up to a set dollar amount or percentage of the employee’s salary (3).
Say, for example, your employer offers a 50% partial match up to 5% of your salary. If you make $100,000 per year, that means the maximum employer contribution would be $2,500. But you’d need to contribute the full 5%, or $5,000, to get the full employer match of $2,500.
Couples that each have an employer match are already at an advantage. Yet, when it comes to making financial decisions, some couples act more like roommates — managing their money individually rather than as a household, Taha Choukhmane, assistant professor of finance at the MIT Sloan School of Management and co-author of the study, told CNBC (4).
“The absence of coordination can be a choice, but it’s a costly choice,” Choukhmane said.
And it’s not the only way Canadians are leaving employer-match money on the table. Some employees don’t bother to opt in (and choose to contribute to an individual RRSP instead), missing out on any matches from their employer. Some might not be contributing enough to maximize their employer match. And some might not understand the ‘vesting’ terms, leaving money behind if they switch jobs.
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Another common mistake is cashing it out when they leave for another job, which triggers an immediate tax bill.
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How to maximize your employer match
To maximize employer matching, contribute at minimum the percentage of your salary required to reach your employer’s match cap. If you’re part of a couple, make sure you’re coordinating your contributions.
“For instance, if one spouse has a dollar-for-dollar employer match up to a cap, and the other spouse has a 50 cents-on-the-dollar match, then the efficient allocation at the household level is to fully exploit the match offered to the first spouse before making any contribution to the second spouse’s account,” according to the study in American Economic Review (5).
By simply reallocating their existing contributions, couples could “increase their retirement wealth without changing their consumption.”
It’s not only couples who can benefit. Whether you’re an individual or a household, you’ll want to review employer-matching opportunities to avoid common mistakes.
For example, you’ll want to fully understand your company’s ‘vesting’ schedule, which is a tactic employers use to encourage employee retention. So, for instance, they might only pay out your employer match if you stay in your job for a set period of time — say, five years. If you leave before that time, you might forfeit the employer contributions, although your contributions are yours to keep (6).
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If you change jobs frequently, this should be a consideration. To avoid a big tax bill, transfer your funds into an individual RRSP rather than cashing it out.
If you contribute to a Group RRSP, you can still contribute to an individual RRSP (though if you have a Group RRSP with employer matching, you may want to consider contributing to that first). But keep in mind that employer contributions still count toward your annual RRSP limit.
Your 2026 RRSP contribution limit is the lesser of $33,810 or 18% of your 2025 earned income, plus any unused room that you’ve carried forward (7).
Go on a money date
Lack of communication can lead to other “sub-optimal financial decision-making,” according to the study in American Economic Review, such as not refinancing a fixed-rate mortgage when it’s beneficial to do so, or co-holding low-interest liquid savings and high-interest credit card debt at the same time.
Leaving money on the table isn’t necessarily about inertia. Rather, “many couples have not considered that there might be gains to coordination (8).”
Coordinating workplace benefits, such as Group RRSPs, starts with communication. Couples can set up a regular ‘money date’ to discuss their finances, including their budget, benefits and future goals. Consider going on a money date at least quarterly or during any major life changes, like getting a new job (9).
If you don’t have access to employer matching, you can aim to save a higher portion of your pre-tax income to super-charge your savings. While it may seem like a lot of money, you could save money come tax time if you drop into a lower tax bracket. If you don’t have a Group RRSP, consider putting money aside in an individual RRSP.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
NBER (1, 5, 8); CNBC (2, 4)(9); KOHO (3); Cornerstone Benefits (6); Government of Canada (7)
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Vawn Himmelsbach is a journalist who has been covering tech, business and travel for more than two decades. Her work has been published in a variety of publications, including The Globe and Mail, Toronto Star, National Post, CBC News, ITbusiness, CAA Magazine, Zoomer, BOLD Magazine and Travelweek, among others.
