Tuition costs are continuously rising each and every year and it now costs more than ever to obtain a post secondary education. If you have a loved one who at some point may part take in post secondary education you may want to consider a Registered Education Savings Plan (RESPs). RESPs are savings accounts registered by the Government of Canada used to help individual save for a chosen beneficiaries future education expenses. The investment income made during the duration of the account is tax deferred until withdrawals are made.  This type of savings account can be opened for immediate children, grandchildren, nieces/nephews, siblings, friends, etc. If the child decides not to go to post secondary education there are options to transfer funds into another RESP or transfer to your RRSP depending on the details of your plan.

Family Plan

Using a family plan you can name one or more of your children as beneficiaries of the account. The beneficiary has to be related to or adopted. This can be children, grandchildren, sibling, etc. This way if the primary child that the plan was intended for decides to go to post secondary education then the funds may be transferred to another child on the plan.

Individual Plan  

Using an individual plan you can set up the account for one individual that does not have to be related to you.

Bonds and Grants

The Canadian Government has implemented bonds and grants to make it easier for Canadians to save for their children’s education. In 2003 the Liberals introduced the Canada Learning Bond (CLB). The CLB is awarded to families who qualify to receive the National Child Benefit supplement and is paid to children born after Dec. 31, 2003.  The CLB initial contribution is $525, the extra $25 to help cover the cost of administrating a RESP. The CLB then pays $100 each year to the RESP until they turn 15.

The government also offers the Canada Education Savings Grant which provides money towards the RESP depending on your net family income. The money granted could be 40, 30 or 20 cents per dollar on the first $500 you save.  No matter the amount of money your family makes, when you save more than $500 the Canada Education Savings Grant will give you at least 20 cents for every extra dollar, up to $2,500.

Tuition and living expenses for students has been continuously rising for years. The job market is increasingly competitive and post secondary education is more popular than ever before. Be there to support the educational dreams and aspirations of the youth in your life by setting up a RESP.  To learn more about preparing for education, or if you have any questions or concerns please call or e-mail us to set up an appointment. We as Svab Insurance are here to guide you.

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