Registered Educational Savings Plan (RESP)
As post-secondary education costs steadily climb it is more important than ever to plan for your child's education. This is why it is so important to start savings as early as possible.
An RESP is a registered plan to which you contribute for a child's post-secondary education. RESP contributions are not tax-deductible but the income and growth earned inside the RESP grows tax free until the child enters a post-secondary institution and is eligible to receive payments.
You can make a lifetime total contribution of $50,000 with no annual limit over 31 years.
The federal government offers an incentive for those opening a RESP. They will pay you a Canada Education Savings Grant (CESG) on a portion of your contribution.
On the first $2,500 contributed to the RESP each year up to and including the year the child turns 17, the government will contribute an additional 20% into the RESP. The maximum CESG available for a single year is (20% of $2,500) up to a lifetime maximum of $7,200 for beneficiaries born after 1997.
When your child enters college or university they will begin to withdraw the money to pay for education related costs. The grant and the growth portion will be taxed in the hand of the student over a number of years the tax payable should be minimal.
Opening a Family RESP at Caldwell Securities Ltd. is one of the most effective ways to save for your child's future education. There is no annual fee for a Caldwell RESP.
A Caldwell Family RESP can have more than one beneficiary. The funds contributed, as well as the governemtn money, can all be used for the post secondary education for any, all or only one of the beneficiaries. This allows for a tremendous amount of flexibility in planning.
To have a Caldwell RESP Specialist contact you, please click here.