A post-secondary education can be the key to unlocking life’s opportunities. However, as the cost of living increases over time, so do educational expenses at post-secondary institutions. Financing these costs may be difficult if you start late, especially if you have more than one child. A RESP can help offset these costs by working out a savings plan with your advisor and taking advantage of the benefits of a RESP.

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RESP Fast Facts

What is it

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  • A plan designed to accumulate money to finance post-secondary education
  • Investment earnings accrue on a tax-deferred basis
Who can use it family
  • Parents, grandparents, other relatives
  • Family friends
  • Adults planning to return to school

Main advantages

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  • Money invested grows tax-deferred
  • When money is used to pay for education costs, the investment growth and grant amounts that are part of the withdrawal are taxed as income to the student (assuming as a student they will be in a lower tax bracket, and will pay little or no tax)
  • If you take full advantage of the guidelines for a RESP, and meet all qualifications, you could be receiving a maximum of $9,200 per child from the government to help pay for your childs education!! (see gov’t grant chart below for more details)
  • Generous contribution limits: up to a lifetime maximum of $50,000 per beneficiary
  • There are a wide range of investment options to choose from
  • Family plans allow accumulated earnings to be shared among more than one beneficiary

Government Grants

                              Canada Education Savings Grant (CESG)                                                           Canada Learning Bond (CLB)                               
  • Equal to 20% of annual contributions (maximum of $500 per beneficiary/year, or $1,000 if catch-up room available)
  • Additional grant of up to $100 per beneficiary/year for lower-income families
  • $7,200 lifetime maximum per beneficiary
  • Beneficiaries are eligible up to the end of the calendar year in which they turn 17 (special rules apply to beneficiaries aged 16&17)
  • For beneficiaries born on Jan.1,2014 or later, whose primary caregiver receives the National Child Benfit Supplement
  • $500 inital bond plus $100 per eligible year up to age 15 of the beneficiary
  • $2,000 lifetime maximum per beneficiary
  • Must apply before the beneficiary turns 21
  • No contributions required
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