Education Planning
One of the most valuable gifts you can provide your children or grandchildren is financial support toward their education. With costs continuing to rise, proper planning and the guidance of a financial advisor is essential to a successful future. At Experior Financial Group, we’ll utilize tools such as the Registered Education Savings Plan (RESPs), and TFSAs, as well as non-registered savings to plan for your child or grandchild’s ability to attend post-secondary education.
RESPs are one of the most effective personal finance tools available for families. With up to $7,200 available for most children, and tax-advantage growth for deposits up to $50,000 per child, we encourage families to utilize this tool to plan for a successful educational future.
What is Registered Education Savings Plans (RESPs)
The Registered Education Savings Plan is a tax-deferred savings account, which allows a subscriber to save money for a beneficiary’s post-secondary education.
Over the past 15 years, RESPs have undergone significant changes and are now one of the most useful education savings vehicles for children . Although contributions are not tax deductible, earnings accumulate in the plan tax-free . Once paid out, the earnings are taxed in the hands of the beneficiary. Presumably, the child will be in a low tax bracket when the funds are withdrawn, and will therefore pay little or no tax.
To open an RESP account, both the subscriber and beneficiary will need Social Insurance Numbers (SIN) .
Canada Education Savings Grant
The Government of Canada provides further incentive to individuals saving for their children’s education through the Canada Education Savings Grant (CESG), introduced in 1998 . The government will make a matching grant of 20% of the first $2,500 contributed each year to the RESP. To be eligible, the beneficiary must be under 18 years of age and also have a SIN number.
