Registered Education Savings Plan (RESP)
RESPs are education investment plans
that help you accumulate money for a child’s post secondary education.
An RESP is an easy way to save for a child’s
future. Planning for a child’s education through
RESP contributions is a sound, responsible, simple
way to help pay for a post-secondary education.
FREE Money
The federal government will provide a Canadian Education
Savings Grant (CESG) of 20% on the first $2,000 in
annual RESP contributions for children up to age
18. The maximum
annual grant is $400 creating a maximum total grant
of $7,200 (20% x $2,000 x 18 yrs). To explain the
added value of the CESG, let’s assume annual contributions
of $2,000 earning an 8% compounded annual rate
of return for
18 years - the $400 grant would provide an additional
$16,179 in total value at the end of 18 years!
Important
RESP Facts
- Earn an
immediate return of 20% on contributions up to $2,000
a year with the CESG;
- Income earned accumulates tax
free until withdrawn - Students (with little or no
income) withdrawing
RESP funds
will owe little or no tax;
- Virtually all full-time,
post-secondary education is eligible;
- Option to change
beneficiary;
- May transfer RESP earning to your own
or spousal RRSP (certain limits and conditions
apply);
- RESP contributions and earnings
may be withdrawn any time (certain conditions
apply).
Small and Steady, yields big
returns!|
Setting aside regular
payments is the simplest and most reliable strategy
for building
investments and
making
financial commitments. A pre-authorized
contribution plan while your
children are still young is the
best way to build the value of your education
savings
plan.
Sound
Financial Advice
At your Credit Union, we know that RESPs
make sense, but in order
for you to understand
all
the benefits,
and to
feel comfortable about your decision
to invest, we suggest you take
advantage of
our full
financial planning
services.
Here at PenFinancial our Investment
Advisors are committed to providing
superior personal
service
that will ensure
you have the most effective education
savings and investment program
possible. Contact
us today
to discuss an RESP.
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