child education

Illustration of Registered Education Savings Plan (RESP)

When your children are minor, it might appear post-secondary education is a long way in the future. However, college and university are more important than ever, if we want our children to have more choices in their life, you better start planning ahead.

One common struggle many Canadian parents are facing is that the cost of post-secondary education have been on a continuous rising trend. In 2016/2017, the average annual under-graduate university tuition in Canada for a full-time student is expected to be $7,437, compared to $4025 in 2003/2004.

Not only that, tuition and related fees only account for about one-third of the costs that students are facing every year. When including accommodation, food, transportation, books, laptops/tablets, leisure, the total cost of a 4 year post secondary education could easily add up to over $80,000.

So what is the saving plan for your child? Let’s consider the following.

– Suppose your child was just born this year. To start accumulating savings for their education, you setup a RESP account, and start contributing $200/month into it.

-Therefore, you will have contributed a total of $43,200 over 18 years.

-To encourage you to save for your child’s education,  the government also provide $7,200 of Canada Education Savings Grant (CESG), which is a matching grants as a result of your contribution.

-(*) Assuming the annual rate of return is 6%

-Adding your contribution, investment growth and matching grants from the government, the total RESP balance could accumulate to $90,346  Since we have not accounted for the inflation, it might not fully covered for the total cost, but it is a good amount to supplement for the above education costs. (Note: To make up the short fall, consider supplementing with this alternative savings strategy for your child:


Would you procrastinate doing anything and end up with just $43,200? Or would you rather start savings for your child, and have the possibility in growing their savings to $90,346? The decision is your to make.


  • Disclaimer:
    • The above calculations with the RESP Calculator on the Mackenzie Investments’ website, while the figures are obtained from the Mackenzie Investment’s RESP guide.
    • (*) stands for assumption. Figures such as investment rate of return, inflation, education costs are not guaranteed, could be differed depending on individual situation. Although we tried to do the calculation as accurate as we could, it is not guaranteed to be error free. This is only for illustration purpose, and do not intend to provide any financial advice. Please consult a financial advisor before making decision. Fees and commission may be involved when investing within RESP. There could taxation impact upon withdrawal from RESP. Rules may be subjected to change without notice.
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