Top 5 RESP Tips
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Published on
September 14, 2023
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Start Contributions Early and Make it Automatic
Through Pre-Authorized Chequing programs (PACs), small amounts of money are automatically withdrawn from your bank account and invested on a regular basis. The money set aside in a RESP has the potential to grow and compound regularly. This will also help you attract ongoing government Canada Education Savings Grants (CESG).
Talk to Statera Financial Planners About the Best Plan for You
You can choose between an individual or family RESP. Only one child can be the beneficiary of an individual plan; however, family plans can provide greater flexibility when it’s time for education withdrawals as it can have multiple children listed as beneficiaries.
Maximize Your CESG Amount
Try to contribute at least $2,500 a year to get the maximum grant. Also, take advantage of carry forward CESGs if you contribute less in any one year. A total of $1,000 of CESG can be paid in any one year into the RESP.
Don’t Withdraw Your Contributions From an RESP
If you take back your contributions before your child starts attending post-secondary school, a proportional amount of the CESG must be paid back and CESG contributions can be suspended for two years. Try to leave money in the RESP where it will grow to pay for your child’s education.
Have a Back-Up Plan in Case Your Child Doesn’t Attend University or College.
Talk to Statera Financial Planners about what avenues exist in this outcome. We can help with how taxation, the grants and investment growth may be considered. Some options are better than others depending on your circumstances!
As financial planners, we do not provide specific tax and legal advice. You should always consult your accountant and/or lawyer where necessary. Because of the many ways a strategy may be impacted when segmented, we prefer to communicate collectively with your external professionals to ensure that all recommendations and action plans are in the overall best interest of you, with your professionals working with common goals in mind.
You are never obligated to act on our recommendations of products, services, or advice.