RESPs

Investing in the future-education savings

REGISTERED EDUCATION SAVINGS PLAN
The secret's out. Today's post-secondary education is an enormous expense. But, you can avoid drowning in debt when it's time for your child to hit the books by saving now in an RESP.

What's great about investing in an RESP is the fact your funds grow tax-free until withdrawn.  Additionally, the variety of RESP plans available provides you with control and flexibility to establish a plan that's right for you. Whether you're saving for your child, grandchildren, friend, or even yourself, there's an RESP fit for you.

FAMILY PLANS
An ideal choice if saving for more than one child, family plans allow funds to be divided between one or more beneficiaries. Each beneficiary (child) must be connected by blood or adoption to each living plan subscriber. Plus, if a child chooses not to pursue post-secondary education, funds may be transferred to another child under the same plan. Contributions can be made to this plan until the child turns 21.

INDIVIDUAL PLANS
A plan designed to save for one particular person, here, the recipient does not have to be related to the subscriber and does not have to be under age 21 when named. You can even set up an individual RESP for yourself-being both the subscriber and the recipient. Because it's never too late to learn, it's never too late to save. That's why contributions to this plan can be made up to 22 years after its creation.

GOVERNMENT CONTRIBUTIONS
Better education makes better citizens, that's why the government contributes to RESP savings. Funds are provided in two forms: the Canadian Education Savings Grant (CESG) and the Canadian Learning Bond (CLB). However, these programs are for children only. Adults saving for their own educations are not eligible. CESGs add an annual amount based on your family income, with a lifetime contribution limit of $7,200. The CLB is a grant offering yearly payments to modest income families with children born after December 31, 2003. The CLB has a lifetime limit of $2,000 per child.

Education is a big investment. Saving for it can be a big undertaking. For more information on RESPs and other investment and insurance opportunities, visit your Rice Financial advisor.