Secure Their Future with an RESP

Written By Passion Works Digital
A young male, and two young females stand together with arms around each other and holding their diplomas dressed in graduation robes.

How high will tuition costs be in 5, 10 or even 15 years?

Projections indicate that in 2027 it will cost more than $114,063 for a 4-year university program for a student living away from home.

The Registered Education Savings Plan (RESP) is a financial tool specially designed to accumulate savings to be used as a financial resource for a beneficiary’s post-secondary education. As with an RRSP, the federal government allows the investment income to grow tax shelter until the money is withdrawn from the plan.

The Advantages of a RESP:

  • Accumulate the necessary funds to finance a child’s post-secondary education (Contributions are limited to $50,000, per beneficiary, for life).

  • Eligible for a government grant equal to 20% of your annual contributions to the RESP (up to $500 per year to a maximum of $7,200 per beneficiary)

  • An education bonus of up to 15% of the contributions to the RESP will increase the income paid as Educational Assistance Payments (EAPs)

  • The chance to watch your money grow sheltered from tax.

  • Flexibility to change the plan’s beneficiary.

  • Withdrawals of contributions are tax-free.

  • The investment income is transferable to your RRSP if the child chooses not to pursue a post-secondary education.

Passion Works Digital https://passionworksdigital.com
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