ASK THE EXPERT:
DON'T UNDERESTIMATE THE POWER OF AN RESP – Christianne Pleau, CFP, AFCC, FCSI, SISIP Financial
What is the best way to save for our child’s post-secondary education? Should we start an RESP? Absolutely start an RESP! Saving for your child’s higher education is a major goal for most parents, so making contributions towards a Registered Education Savings Plan (RESP) is an excellent strategy. It is important to consider the extent of support you wish to provide; will you be saving to cover 100% of the cost, or perhaps just a portion to get them started? Advantages: • The government offers a 20% grant on the first $2,500 contributed to an RESP each year up to a lifetime maximum of $7,200 (Canada Education Savings Grant (CESG)). • Your contributions grow tax-free and upon withdrawal - for educational purposes - gains would be taxed unto the beneficiary (your child) at their likely lower tax rate. • Maximum lifetime contribution for each child is now $50,000. The RESP offers 2 plan options – Family or Individual: with a Family Plan you can add beneficiaries as your family grows, earnings can be shared and named beneficiaries can use the CESG, (to the respective lifetime limit of $7,200/child). Not so with the individual plan. Your local SISIP Financial Advisor can guide you through the process, answer your questions and help you achieve this goal for your children. To make the most of the RESP: • Start early and make contributions automatic (preauthorized monthly payments) • Contribute at least $2500/year to secure the maximum annual grant ($500)
Children can start saving for their own education savings pot with these fun Apps:
* Additional provincial incentives
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