Education Planning

Graduation Cap on calculator

Planning for A Child’s Future

Supporting a child’s education can be one of the most rewarding aspects of success and one of the most important elements in your financial plan. With rising inflation and the high cost of education, planning to contribute to another’s higher education may require an early start.

There are a variety of investment vehicles and tax-efficient options to contribute to the cost of higher education. As your trusted partner, our knowledge and professional guidance can help you analyze the tax benefits, ownership structure, risk and contribution limits involved – even what to do with your leftover education funds if your aspiring academic earns a scholarship.

Registered Education Savings Plan (RESP)

When you invest in potential, you’ll do more than help make the dream of education possible for a student in your life. You could provide the inspiration for a legacy of higher learning that’s passed on for generations to come. What’s more, the federal government can provide grants on your contributions so that your savings grow faster.⁽¹⁾ Finally, the funds inside an RESP have the ability to grow tax-deferred, while the withdrawals will be taxed in the hands of the student, often resulting in minimal taxes, if any.⁽²⁾

Working together, we choose the investment strategy that is right for you and your student, keeping in mind that generous contribution limits do exist, regardless of income level.

⁽¹⁾Based on certain maximums and conditions. The Canada Education Savings Grant (CESG) offers matching contributions of 20% on up to $500 of annual RESP contributions per beneficiary. Grants are payable until the year the beneficiary turns 17. Maximum lifetime grants are $7,200 per beneficiary and maximum lifetime contributions are $50,000 per beneficiary. It is also possible to catch up any grants not received in previous years by making contributions of up to $5,000 per year.

⁽²⁾Certain conditions may apply. Earnings inside an RESP are not subject to tax. Withdrawals used for eligible education expenses are taxable to the beneficiary of the RESP. However, if you withdraw money from an RESP and do not use it for eligible education expenses, you will be subject to income tax plus an additional tax of 20%.

Giving the gift of greater opportunity by supporting a child’s education can be one of the most rewarding aspects of success and one of the most important elements in your financial plan.