www.lakeshorenews.bc.ca
Friday, May 31, 2013 Lakeshore News A9
Family fun and bicycles
Above: 7-year-old Giorgia Thompson comes up with a lemon while her friends look during the rhubarb and lemon bob, an activity stop along the route of the downtown family fun ride last Friday. Right: Emmet Millard clowns around as he waits to begin the family ride. Howard Vangool photos.
mallarkey
by Daron Mayes
RESP refresher
Last week we told you about $1,200 of “free” money the BC government was giving to kids who have a registered education saving plan (RESP). This week we are going to remind how RESPs work and how the federal government will also give you “free” money for your plan. So how do RESPs work? Here is an overview: • Parents, grandparents, or anyone else can create and contribute to a child’s RESP. In fact, this is a great gift idea for birthdays or Christmas instead of a cheap toy. Your child or grandchild will probably give you a funny look, but they will get over it and learn to appreciate it later in life. • The biggest benefit to the RESP is the “free” money the federal government throws in when you contribute some of your own. This is called the Canada Education Savings Grant (CESG). For every dollar you contribute, the CESG adds 20% to a maximum of $500 per year, per child, until the child reaches age 17. For example, to maximize the grant in a given year you would need to make a contribution of $2,500 to receive the maximum basic grant of $500. If you miss a year or two of contributions, the government allows you to make it up with an RESP contribution of up to $5,000 in a given year entitling you to a basic grant of $1,000. • If your family net income is lower than ~$87,000, you can qualify for
additional CESG. The additional CESG is 10% of the first $500 if your net family income is between ~$43,500 and ~$87,000. If it is below ~$43,500 then you get an additional 20% on the first $500 contributed annually. More “free” money! • Contributions for an RESP are subject to a lifetime maximum CESG of $7,200 per child. • Unlike RRSPs, RESP contributions are not tax-deductible. However, investment income and gains generated within the RESP are allowed to grow on a tax-deferred basis; meaning it is taxable, but not until the income is withdrawn. • When RESP funds are used for post-secondary education costs, the income portion earned will be included in your child’s taxable income. Most students don’t usually have much income and will be eligible for the tuition and education tax credits so they likely will pay little or no tax. • If your child doesn’t pursue post-secondary studies, the income and growth can be rolled over taxfree into your RRSP or a spousal RRSP, provided that contribution room is available. The CESG portion of the funds must be returned to the government. In summary, when the government is giving out “free” money or perhaps I should say a refund of all the taxes we pay; you want to take advantage of it.
A day to learn
ILearn Street is a one-day event taking place at the Salmon Arm Fairgrounds on Sunday, June 9 from 1:00–5:00 p.m. ILearn Street provides the opportunity for children and youth to experience, imagine, and actively participate in various learning opportunities through fun, interesting, innovative, and interactive methods with various institutions in the community. Its goal is to unite and inspire a desire and love of exploration and learning in each participant. This project is based on a voluntary service and is initiated by the Shuswap Eagles Pathfinders Club, a non-profit organization whose main area of activity focuses on the education of children; to encourage respect for nature; respect for themselves and others; and to broaden their knowledge in various areas. Entry to this event is free, and early entry is available to participants with special needs.
Take a copy of the Lakeshore News with you. Then, have a photo taken of you holding the paper, and send it in to us with some information about your trip. We will print it and pay you $10, plus enter you in our annual Travels To contest to win a further $20. Bring it in to 161 Hudson Ave NE or send it to editorial@lakeshorenews.bc.ca
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Carol Creasy • 250-835-8587 Mall Arkey Investments This Week Where the serious invest their money There isn’t a lot of change to our shop-for-the-best interest rates this week. Have you bought your TFSA yet? Remember the limit has increased to $5,500 this year. Do you need travel or mortgage insurance? Pile your money in a wheelbarrow and bring it on in. You want to make Mall Arkey happy, don’t you? Savings Account 1.55% no change Cashable GiC 1.20% no change 1 year 1.90% no change 2 years 1.95% no change 3 years 2.10% no change 4 years 2.15% no change 5 years 2.30% no change
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Centenoka Park Mall • 250-832-5000 Email: daron@mallarkey.ca Website: www.mallarky.com