Your investing questions, our clear answers.

Our response:

A Deferred Profit Sharing Plan (DPSP) is set up by your employer to help you save for retirement. You don’t make contributions – the company does, from a portion of its profits.

Speak to your employer to understand how withdrawals are handled – you may not be able to make withdrawals while you are still employed. If allowed, any withdrawals will be fully taxed as income.

When you leave your employer, your DPSP money can be transferred to an RRSP or RRIF, used to buy an annuity, or taken in cash (it will be taxed as income in the year you receive it). Learn more about DPSPs on GetSmarterAboutMoney.ca.