RESP: Why saving for your child’s education is more important than ever

Do you contribute to RESP? Saving for your child’s education is more important than ever. Read our blog post for our tips to help you save without worrying about your children’s future!

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Why saving for your child’s education is more important than ever

Post-secondary education has never been more important to a secure livelihood.

Canadians with a university degree earn significantly more than their counterparts without one. This is particularly true for young women. A female with a bachelor’s degree, for example, earns 60% more than one with a high school diploma.

As a parent, you want to do everything in your power to help secure a successful future for your child. Helping them continue their education past high school is an important way to do that, but the cost of higher education has increased. Setting up a Registered Education Savings Plan (RESP) and contributing regularly can help.

When you save with an RESP, not only does your investment compound over time, you also receive additional contributions from the government. In essence, by using an RESP, you’re getting “free money.”

Some key points to keep in mind:

• Receive up to $500 a year in “bonus” funds. The Canada Education Savings Grant (CESG) provides 20% of the first $2,500 of your annual contribution.
• The basic CESG is not income-dependent, so every family with a qualifying RESP is eligible.
• If your income is below certain thresholds, you might also receive additional CESG amounts or be eligible for the Canada Learning Bond (CLB).
• The maximum CESG you can receive for a child over their lifetime is $7,200.
• There is no annual limit on RESP contributions, but as of 2007, the maximum you can contribute to any one child’s RESP is capped at $50,000.
• The deadline to qualify for the 2020 CESG is, December 31, 2020.

Don’t miss out on collecting the CESG for your child. Contribute by December 31st. The sooner you make your deposit and collect the CESG, the more time these funds have to compound and grow.

Need help setting up an RESP or knowing how to invest it effectively? Book your complimentary 30-minute consultation session with our team!

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