Parent’s Start Saving for your Child for Future Education by RESP

In recent times, it’s not just the standard of living in Canada that has been on the rise; post-secondary education costs have risen significantly as well. The Canadian government created a tax-free education savings plan to help parents save for their children’s future education plans. Today, students in university pay 40% more in fees than what it used to be ten years ago. The best remedy is to start saving money for your child’s education as early as possible. The best way to ensure your children the best education possible is to open a Registered Education Savings Plan (RESP).

The easiest and hassle-free way to save money

One of the simplest ways to ensure your children get top-quality post-secondary education is to open an RESP. The most significant benefit of this plan is that the government matches 20% of the annual contribution amounting up to $500 for each child. The lifetime maximum of this plan is $7,200. Additionally, when you choose to take the money out, you will not be taxed, but your child will, and since they do not earn a substantial amount of income, the funds withdrawn will usually be tax-free. If your child does not have any interest in pursuing post-secondary education, you can get back the money invested, and the best part of it all, you will not be taxed.

Do not regret it later!

Over half of the parents in Canada do not invest in their children’s future education plans, and they regret it later. A recent study by IPSOS says that Canadian parents do not take advantage of the federal and provincial grants of the RESP, and they are ignorant to the fact that the money contributed by the government will continue to grow over the years, if invested correctly. This fantastic savings tool allows parents, grandparents, relatives, legal guardians, and family friends to contribute to the beneficiary’s (child) RESP. All that is required to open an RESP is an appointment with a professional RESP provider like Rupinder Rai and the child’s Social Insurance Number (SIN).

The biggest gift you can give your children is providing them with a sound education through an RESP. So, starting to save money as early as possible is the right option. To find out more details on RESP or open one, please do not hesitate to contact Rupinder Rai today.