Saving with RESPs

Registered Education Savings Plans (RESPs)

Education costs are increasing every year and this trend will continue. Many studies predict that the cost of a four year university undergraduate degree could be upwards of $100,000 in the very near future. Most post-grad programs already cost more than this amount. Today, the majority of employment requires some form of post-secondary education or specialized training.

Now the good news. The government wants to give you money to make it easier to help your children attain post-secondary educations without going into massive debt.

How do RESPs work?

• Canada Education Savings Grant: The government will give you $500 (or 20%) for every $2,500 you contribute per year per child. Contribute the max for 10 years and that means you get $5,000 free money plus the interest. Based on your net family income, you may be eligible for an additional 20% on the first $500 of annual RESP contributions.
  • To save $2,500 per year, you need to budget just over $200 per month. Your Coach will help. Even if you don't hit the max number, the free money still adds up. The lifetime maximum you can receive is $7,200.
• Canada Learning Bond: You may be eligible for the Canada Learning Bond as well. This bond is for families who are eligible to receive the National Child Benefit. The maximum available amount for this bond is $2,000.
• Visit www.serviceCanada.ca and follow the links to raising a family for more details on all the available government grants.
• An RESP is tax-deferred, not tax-deductible. The beneficiary must be a Canadian resident.
• The maximum lifetime contribution per beneficiary is $50,000.
• Annual contribution deadline is December 31.