Saving for Your Child’s Education with RESP
Your children’s education is no doubt one of your top priorities. Post-secondary education will make a significant difference to your children’s earning potential and standard of living. In fact, Canadians with a high school graduation certificate earned an average of $37,403, while those with a bachelor degree earned one and a half times more – $56,048 (Statistics Canada, 2006 Census). Yet, government funding to universities is dropping, and post-secondary institutions are making up the shortfall by raising student fees. By setting aside education funds for your children now, you can ensure their opportunity to attend college or university and ease the debt they may carry upon graduation.
Registered Education Savings Plan (RESP)
It is a highly effective way to maximize the money available to your children when they enroll in a full-time, post-secondary program. Although your contributions are not tax-deductible, money inside the plan will grow tax-free until it’s withdrawn by your children. In addition, the government has several grants to help you build your education savings. The Basic Canada Education Savings Grant (CESG) is available to everyone. If you start saving early enough, your child might be able to get the maximum amount of grant, which is $7,200.
In addition, the Canada Learning Bond (CLB) helps families of modest income save for children born after December 31, 2003. Families who receive the National Child Benefit Supplement would qualify for the initial CLB grant of $500, and $100 for each year of eligibility until the child is 15 years old.
How to open an RESP
Get a Social Insurance Number (SIN) for your child.
Decide what type of RESP account you want to open: a family plan or an individual plan.
Fill out application forms, in which I’m more than happy to help you with this.
To obtain more information about the RESP, feel free to contact me.