November 16, 2015
RESP – A SMART INVESTMENT IN YOUR CHILD’S FUTURE
How can young parents help their children get a secure, hassle free education in a few years from now? By opening up and contributing to an RESP now.
A Registered Education Savings Plan [RESP] is a popular education savings account that is registered with the Government of Canada. With an RESP, you may be able to receive other grants and subsidies, such as the Canada Learning Bond, Canada Education Savings Grant and more. Financial institutions (banks or credit unions), certified financial planners or group plan dealers provide RESPs. The quickest, easiest and safest RESP account is an RESP GIC account at your local bank branch. All the major banks have this type of account and they are all very similar.
So what is the value of having an RESP and should you really care? As a young family, you may have a host of financial priorities and so focusing on a child’s education for the future can be an overwhelming decision especially when there are pressing needs in the present like insurance, mortgage, daycare expenses and more.
At the same time, contributing to an RESP can be one of the smartest investments parents will ever make. Even the Federal Government helps you by adding 20 cents for every dollar you put into an RESP through the Canada Education Savings Grant (CESG) program.
According to Statistics Canada’s latest report, an average tuition fee across the country is closing in on $6,000 per year. Now add another $1,200 for books and supplies, plus $4,000 to $8,000 in living expenses, and a four-year undergraduate degree could set you back $45,000 to $60,000 in today’s dollars. And in a decade from now, you can expect those costs to exceed $100,000! As you can see nothing beats the option of setting up a Registered Education Savings Plan in Canada!
So the most important step as a parent is to open an RESP account and start off with small monthly contributions. You can bump up your contributions as your income affords it up to a maximum of $2500 annually, per child. Whatever the amount you decide, the smart thing to do is to set-up an RESP as soon as your child is born. Now with the new enhanced Universal Child Care Benefit, parents can also expect to receive an additional $60 per child, so if you want you can use this to increase your RESP contribution per month.
Having said that, it is important to choose the RESP provider that best suits your needs.
That’s why you need a trusted, skilled team by your side. Your RESP provider can help you choose the type of RESP that is right for you.
Learn more about how the knowledgeable team at Zen Plus can help you decide on the best RESP option for your child.
Contact us for a free consultation by simply filling this secure online contact form or by reaching Jelan at 416 220 1010 today.