RESP: A Registered Education Savings Plan

RESP: A Registered Education Savings Plan

It is easy to imagine your child, a degree or a diploma in hand, ready to embark on a professional career. But how can you offer this opportunity to your child, with all the financial obligations in the world today?

A registered education savings plan (RESP) is a financial vehicle that is specially designed to build up savings for a child’s postsecondary education. The amounts accumulated in an RESP are intended to cover the tuition fees and all education-related expenditures, such as housing, school supplies, food, transportation expenses, etc. The registered education savings plan (RESP) is the ideal financial vehicle to help you save for your child’s postsecondary education.

The federal government permits the investment income from an RESP to grow in a tax shelter as long as it is not withdrawn from the plan. Clearly, the RESP is to education what the RRSP is to retirement.

In addition, to encourage parents to invest in the postsecondary education of their children, the federal government will provide a grant corresponding to 20% of the annual contributions paid into the plan, up to a maximum of $500 per year, per beneficiary.

We at YourInsuranceGuy.ca are experts in explaining the  various different segregated funds offered by several insurance companies in Canada. Please feel free to contactus at aman@yourinsuranceguy.ca or at 1 416 509 2540. Please visit us for a no obligation quote or advice.

 

 

Prepared by:  Aman Kapur

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