Back to School & RESPs
September is often defined by two things, pumpkin spice lattes reminding us that fall is here and back to school time for the kids!
These days even PSLs can be expensive but the cost of school, especially post-secondary, can feel like a hard burden to manage! While it may seem like a faraway future concern for some, the truth is that thinking about it now is important when we want our children to be successful.
The great news is parents can start planning for their children’s furthering education from the day they are born and receive a SIN number!
One great way to get started is with a Registered Education Savings Plan (RESP).
A RESP can allow parents to save up to $50,000 per child for post-secondary education and related expenses (tuition, books, board, meal plans, transportation etc.).
As an incentive to help you save, the government offers the Canada Education Savings Grant (CESG) – a grant of 20% on the first $2,500 contributed to a RESP each year for a total of $500, with a lifetime maximum CESG of $7,200.
In addition, the Canada Learning Bond (CLB) helps families of modest income. Families can qualify for an initial CLB grant of $500, and $100 for each year of eligibility until the child is 15 years old.
These grants are in addition to your $50,000 and can be invested in a variety of different manners to help meet your savings goals!
“But what happens to this money if my kids decide against attending post-secondary or receiving any specialized training in the trades etc.?” A great question, but not to fear! Parents can roll unused RESP assets into a RRSP or spousal RRSP, provided you have contribution room. In instances where it could apply, if your child has developed a disability that would eliminate the possibility of post-secondary, parents can also roll these assets into a Registered Disability Savings Plan without penalty.
Let’s get planning for your child’s future now, instead of when it comes time to write the tuition cheque! Contact Statera Financial Planners to learn more about this program and the investment options available to meet your family’s education savings goals!