The 4 Easy Steps to a Registered Education Savings Plan (RESP)
As a Family Business since 1946, we know that building families is an important and rewarding journey. As parents and grandparents, we invest time, effort, patience, and money into giving our children and grandchildren the best life we can. You may have heard that there are government programs that will help you save for the costs of post-secondary education. Here’s a quick briefing on how a registered education savings plan works:
1) Apply for a Social Insurance Number
When Baby is born, you can apply for a Social Insurance Number (SIN) at the same time as their Birth Certificate. In order to take advantage of government grants and start saving, a Social Insurance Number is necessary to set up the registered education savings plan.
2) Choose a Financial Institution
Select a financial institution of your choice to help build an Education Savings Plan. This can be done by a variety of providers, including here at McDougall Insurance and Financial. We will apply on your behalf for government grants that are available to you. You can choose to invest based on your personal preferences, and we are able to offer mutual funds as well.
The Federal Government will match 20% of your contributions to your child’s account, up to certain limits. For example, if you can save $50 per month, the government will kick in an additional $10 every month. Who doesn’t love free money? This benefit is available to Canadians of any income level! In addition, there are specialized grants that we can apply for if you are a low-income family.
3) Set Up Pre-authorized Withdrawals
You can set it up contribute as little as $25 per month, and that can continually be adjusted to your budget and goals on an ongoing basis. If you receive a unexpected large sum of money and you would like to contribute it, do it! Just keep in mind that the Government will only match your contributions up to a certain limit. If you have reached that limit that sum of money may be better invested elsewhere.
4) Keep Your Savings Goals on Track
Even if paying for all of your child’s education is not possible, any contributions will help to reduce the debt burden on your new graduate. Work with us to help ensure you keep your savings goals on track.
What if my child or grandchild is not a baby anymore? Is it too late?
Absolutely not! In fact, you can even “catch-up” government contributions, up to certain limits. McDougall Insurance and Financial is here to help you. If you would like to find out more or begin helping your child or grandchild give us a call at 1-800-361-0941!