A Registered Education Saving Plan (RESP) is a tax sheltered plan that allows you to save for your child’s post-secondary education. It is important to save early for a child’s education. The costs associated with post-secondary education continue to increase each year, and can be substantial when factoring tuition fees, rooming and boarding, meal plans and textbook expenses.
One of the main benefits of the RESP is the Canadian Education Savings Grant (CESG) – the Canadian government will provide 20% of what is contributed to an RESP to an annual limit of $500, and a lifetime limit of $7,200.
An RESP allows flexibility, tax-sheltered investment growth and the direct assistance from the government to reach educational savings goals.
The maximum contribution that the subscriber can make into a RESP per beneficiary is $50,000, lifetime. You are able to make contributions to an RESP until the beneficiary’s 31st birthday and funds will be available to use towards post-secondary education until the age of 35.
> To learn more about RESPs, contact a Torce Financial advisor today.