RESP

It is easy to imagine your child, degree in hand, ready to start a professional career, but do you every ask yourself how you will be able to provide your child this chance with all the financial demands of today’s world?

Giving children access to post-secondary education is something parents hope to be able to do. Unless you decide to take out a loan, it may be quite difficult to find the money needed to pay for 4-year educational program. Statistics Canada revealed that university tuition fees have risen 135%* in the past ten Years!

How high will tuition costs be in 5, 10 or even 15 years?

Projections indicate that in 2021 it will cost more than $85,000 for a 4-year university program for a student living away from home.**

 * Canadian average (2001)  ** Projection based on 3% inflation rate per year. Source: Statistic Canada

Start investing in their future now!

Given the cost of a post-secondary education, it’s better to start saving early. Regular contributions are also a great way to achieve your objectives. Regardless of the child’s age, it is never too late to invest in their future.

The RESP will help you build a promising future for your loved one today!

What is a registered education savings plan?

A Registered Education Savings Plan, commonly known as the RESP, is the best financial vehicle to accumulate savings for a child’s post-secondary education. Two main factors explain its increasing popularity are the Canada Education Savings Grant (CES), which the federal government has been paying out since 1998; and the investment income, that accumulates in a tax-shelter, the same way as an RRSP.

Get an Additional 20% Free.
You’ll benefit from the Canada Education Savings Grant (CESG), a government grant that provides an amount equal to 20% of your RESP contributions. It’s additional money that can add up to $400 per year for each child, to a maximum grant of $7,200 over the life of the plan. The grant money will grow with interest, too.

RESP contributions are not tax deductible from the subscriber's income. However, RESPs offer tax deferral on the interest earned on your savings over the years. If you were to save outside an RESP, your interest earnings would be subject to tax, greatly decreasing the money available for your child’s education.

The EAPs, which represent the investment income portion, the education bonus and the Canada Education Savings Grant, must be included in the beneficiary's annual taxable income during his/her post-secondary studies. Since students are generally low-income earners, the amount of taxes will probably be fairly low or on tax.is payable.

The contribution limits set by the federal government are $4,000 per year per beneficiary; and $42,000 for total limit per beneficiary.

 

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