Aleisha Bosch graduated from St. Thomas University in 2012 and took a job out West, like many Maritime graduates. She worked 40 hours a week as a reporter and photographer for Sylvan Lake News in central Alberta. Like her coworkers, she received medical prescription coverage, dental and eye coverage, and paid into a registered retirement savings plan (RRSP.)
Bosch is one of the lucky few. Many students in New Brunswick – and across Canada – are contemplating their futures, and whether a post-grad job awaits them. In many cases, turning the corner after graduation means filling in for maternity or sick leaves, probationary pay periods, and few benefits.
Unlike most university graduates, Bosch had no student debt, and therefore didn’t mind spending some money on retirement.
“If I was older I might be more concerned with retirement savings, so I might have chosen to contribute four per cent [of my pay] – all my other co-workers who I talked to when I was initially confused about it, told me they contributed 4 per cent. They were in their 40s or older. I contributed three per cent and my company matched my contributions dollar for dollar,” says Bosch.
She wanted more money for everyday expenses, so she paid the minimum into her RRSP – and into her future.
The money she and her employers contributed went to group investment funds. Bosch had the choice of investing in a “conservative” or “aggressive” portfolio.
“With ‘conservative,’ your money will go up slower but there is very little risk. With ‘aggressive,’ your money has the potential to increase faster but there is also a greater risk. I chose a moderate plan, leaning slightly more towards conservative. I don’t like to mess around with money I know I already have. I was happy to just be saving and have my company match it, I didn’t want to play around with it,“ says Bosch.
She’s in the minority. Many young people can’t think of retirement saving, since they’re concerned with paying off student debt – and surviving in low-paying jobs. Bosch was paid $33,000 a year for her effort at work. If the mandatory retirement savings program hadn’t been there, she says she wouldn’t have started putting money away.
“It was essentially free money, but I won’t be seeing that money for a long time,” she says.
Sometimes, new employees can choose between receiving benefits, or padding their pay.
“It’s tempting, but it could bankrupt you,” says Jason Scarbro, head of human resources at St Thomas University.
“In the long term, taking the money means you’re banking on good health.”
Without benefits, many procedures and prescriptions must be paid out-of-pocket, despite Canada’s Medicare system.
If, for example, an employee takes an additional 10 per cent on their pay instead of prescription coverage, trouble could ensue. A diagnosis of diabetes, for example, could be pricey.
If the employee changes their mind, and wants coverage, it could get tricky.
“Some insurance won’t pay towards your pre-existing condition, so you’re on your own for that. It’s a big decision to make,” says Scarbro.
He sees the need for extra cash, though. Even faculty members have debt troubles – especially if they’re coming straight from receiving their PhDs.
“They come in with a huge debt load,” he says.
Many are reluctant to pay into retirement, but the university encourages them to go beyond the six per cent they are required to put away. The university matches their contribution with seven per cent of the employee’s pay.
Scarbro says the best way to pay down debt is to speak to a financial advisor, who can deal with the client one-on-one, based on their needs.
The best way to get a job to pay down those debts is to look far and wide, according to Aleisha Bosch.
“To get a permanent job, you have to go where no one else wants to work. I was in a crappy little hick town writing mediocre stories most of the time. There will always be full-time jobs in the markets no one wants to work in,” she says.