October 5, 2021, ,
The easiest way to save money and grow your children’s education fund is through a Registered Education Savings Plan (RESP). It is a tax-free savings plan created to help you save for your child’s Post-secondary schooling. Additionally, the government matches 20% of your annual contributions up to $500 annually. When you withdraw the funds, an extra tax benefit comes into the picture where the withdrawal amount will be taxed to your children at a low rate instead of you.
Below-mentioned is a few financial planning tips for your children’s education:
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To find out more details about Registered Education Savings Plan (RESP) or see how we can help plan for a child’s post-secondary education, give the Canadian L.I.C team a call today to schedule an appointment. We are based in Brampton, Ont and offer our services all over the country. Our professional & friendly team will be more than happy to assist you with whatever queries you may have.
Have you started saving for your child’s post-secondary education yet? If not, you should! Education costs in Canada are not cheap, and the best way to save money on a tight budget to ensure they get the best education is through a Registered Education Savings Plan (RESP). With unexpected expenses that may arise in the future, putting aside a small amount of money in an RESP will do a world of good in the future for your children.
Below are some of the best ways to give your children the education they deserve:
It is one of the easiest ways to save and grow your child’s education fund. A Registered Education savings plan created to save money for your children’s post-secondary education. Additionally, the government matches 20% of annual contributions, which amounts to around $500 annually, and a maximum lifetime contribution of $7,200 for one child.
Govt Grant $7,200 is free money from the government in addition to your contributions that are growing tax-free in the RESP. Another benefit is when you decide to withdraw the funds, your child will be taxed, and since they earn little to no income, it is practically tax-free. Most parents’ concern is that they fear contributing a sizeable amount each month to the RESP. That is not the case; contributions in the region of $25 – $50 a month are more than enough. The whole concept of an RESP is to encourage parents to save for their children’s education, not make large contributions. Once you sort out your finances, you can increase the contribution. All you need to know is that an RESP can be flexible.
If you cannot devote yourself to making regular RESP contributions, you can request your bank to transfer the contribution amount automatically from your savings account into your RESP. The companies also set up monthly automatic PAC for scheduled contributions.
Try to make some lifestyle changes that ensure you make a decent enough contribution for your children’s RESP. Reduce the number of social gatherings and throw less elaborate birthday parties for your children, yes they might not like it, but in the long run, they will be certainly thank you for it. You can even encourage your relatives that instead of purchasing an expensive gift for your child, they can contribute to your child’s RESP money.
As mentioned above about your relatives contributing money for your children’s birthday instead of buying an expensive gift, you can even encourage them to make contributions on other special occasions of your child like their graduation or during the holiday period.
If you require more information on RESPs or need expert help in getting started, please do not hesitate to reach out to our advisors at Canadian LIC. They will discuss all the necessary options and help you build a sustainable RESP plan for your children. Contact us today to set up an initial consultation.
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