The
cost of post-secondary education is increasing
dramatically while most family incomes are
increasing at a much slower rate, if at all.
As the gap between education costs and income
costs widens, families are finding it harder
to finance their children’s post-secondary
education out of current earnings.
Statistics
show that there is a direct relationship
between the level of education child receives
and that child’s employability and
level of income. A university graduate is
3 times more likely to be employed than
a high school graduate. Take a look at Approaches
to Educational Planning 1999 by Statistics
Canada.
Setting
educational goals and investing wisely at
an early stage of your child’s life
will ensure that the money is there when
needed.
Things
to think about!!
•
What is your child’s ambitions/goals?
• What is his/her aptitudes and
abilities?
• What do you want for your child?
• How much can you afford to spend
on his/her education?
• How much time do you have to invest
for your child?
• Do you have other resources that
can be used for their education?
• Will your child live at home?
• Will your child be able to achieve
scholarships?
Federal
Government's RESP Program
Lifetime maximum $50,000
Previous
annual maximum eliminated
Maximium
annual grant $500 (deposit of $2,500 will
receive $500 in grants)
Lifetime
Canada Education Savings Grant $7,200
A
Plan to Help you Save
•
You can contribute up to $5,000 annually
for a maximum of 21 years (or $42,000
max)
• Not deductible for the contributor
• Growth is only taxed when withdrawn
– usually at a student's lower income
rate
Canada
Education Savings Grant
•
Receive 20% on first $2,500 in contribution.
• Contribution
room can be carried forward
• Higher percentage grant for low
income families.
•
Growth is taxed when withdrawn –
usually at a student's lower income rate.
If
you child does not attend college or university?
•
Contributor can withdraw capital anytime
without penalty, growth is taxed and CESG
money is returned
• Capital and growth can be rolled
over to contributor’s RRSP (CESG
money returned)
• RESP can be transferred to another
child (beneficiary)
Social
Insurance Number
Each
child must have a registered social insurance
number prior to the purchase of a RESP to
receive the Canada Education Savings Grant.
Follow this link to download the .pdf form
you'll need to complete.
Here
is a direct link to the HRDC
website for more information: This link
provides excellent information regarding RESP’s!
