One of the greatest challenges facing Canadian students pursuing post-secondary education is the cost. The price tag on any given degree can be well into the tens of thousands of dollars, and even more for specialized degrees or continued degrees like a master’s or doctorate. With the cost of education continuing to rise, you can help your child or grandchild pursue their dream without accumulating substantial debt with the help of a Registered Education Savings Plan (RESP).
What is an RESP?
A Registered Educations Savings Plan is a dedicated account meant to help save funds for post-secondary education. The account is registered with the Canadian government and can be opened for your child through a trusted financial advisor at an investment firm. recognized provider such as a bank, mutual fund company, investment firms or credit unions. The money contributed will then stay in the account until your child enters post-secondary school, at which time they can receive educational assistance payments (EAPs) from their account to assist with school costs.
What are the benefits?
In addition to saving for the child’s educational future and easing the burden of debt, RESPs have several unique benefits:
• The savings will grow tax-free for as long as they remain in the account.
• RESPs are eligible to hold a variety of investment options to help your money grow.
• Family members can make contributions to your child’s RESP to help save even more.
• You can withdraw your contributions from the plan, tax-free when needed!
• Family plans can be established and giving more flexibility to the distribution of funds
• RESPs can remain open for up to 36-years, giving your child plenty of time to find a program that best suits them.
There are a few limitations to opening an RESP as well. For example, the money saved must be used for a qualifying post-secondary program. If the money isn’t used within the 36-year time frame, or for a qualifying program, it becomes subject to a financial penalty. It can be difficult to predict what path your child or grandchild may take in their educational future, but it’s always a safe bet to be prepared and allow them the option of pursuing post-secondary without incurring substantial debt.
Set your kids or grandkids up for success with a Registered Education Savings Plan that helps them pursue their dreams worry-free! Speak with Darryl Smith of Synergy Life Financial to find a savings plan that’s right for your family, Because every child deserves an education without debt getting in the way.