BMO Nesbitt Burns
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The Ins and Outs of RESPs
Saving For Your Child’s Education
Higher education is something all parents want for their children, but how much will it eventually cost you to provide it? If the current trend in rising education costs continue, a four year university degree in Canada could easily cost over $60,000 in just 10 years.
If you have already started saving, good for you. If you have used a Registered Education Savings Plan (RESP), that’s even better. Contributions to an RESP are limited to a lifetime maximum of $50,000 per child. Although contributions to an RESP are not tax-deductible, all income grows tax free until withdrawn from the plan. As an added incentive, the federal government will deposit a basicCanada Education Savings Grant of an additional 20% of your contribution ($500 annual maximum) directly into the RESP for Canadian resident beneficiaries under 18. Children born after 1997 are eligible to receive up to $7,200 in grants.
If you don’t already have an RESP for your child, the opportunity to collect the government grant for prior years is still available because the CESG contribution room is carried forward and can be used in future years.
To learn more please feel free to contact me via E-mail Werner Hohn or call 519-624-8939 toll free 800-265-6148