We sat down with Robyn Falkovitz from Knowledge First Financial to discover the truth about Registered Education Savings Plan (RESP). 

RESP INTRODUCTION

The Registered Education Savings Plan (RESP) is a federal government tax-sheltered savings plan to help parents save for their children’s post-secondary education.  Your contributions will attract government grant to further enhance your savings.

At what age should I start an RESP?

You can start contributing into an RESP right after your child’s birth.  The earlier you start, the more time for your investment to grow.

My child is 5 years old. Is it too late to start?

It’s never too  late to start an RESP!  If you were unable to start contributing the year your baby was born, there is opportunity to catch up from past years.

What type of RESP do you offer?

At Knowledge First Financial, our Flex First RESP provides utmost flexibility contributing into the plan as well as withdrawing from the plan for post-secondary studies.  Our conservative investment strategy is to protect the value of your savings whiles generating steady growth over the long term. You will receive a loyalty bonus when  your child confirms enrolment in a post-secondary program.

How much should I aim to have for my child’s RESP?

According to Statistic Canada, for students entering a 4-year program in 2039, it could cost over $71,000 without residence and over $130,000 with residence.  While many parents hope to contribute the maximum of $50,000 lifetime into the RESP, it is important to save comfortably.

What grants are there in an RESP?

The government offers the Canada Education Savings Grant, whereby 20% grant is matched on up to $2500 contribution each year, to a lifetime maximum of $7200.  For middle and lower income families, there is an additional 10-20% grant matched on the first $500 contribution each year.  This helps get you to the $7200 faster!  The Canada Learning Bond of up to $2000 is available based on family income and the number of children in your family.

How does the Knowledge First Financial RESP differ from those offered by other financial institutions?

Expertise – Knowledge First Financial specializes in RESPs!  We can help you make the most of the government grants and chart a path to reach your savings goal.

Peace of Mind – Many RESPs are self-directed, which means that you’re in charge of choosing the investments you think are best.  When you choose Knowledge First Financial, we take that weight off your shoulders.

Not-for-profit – Knowledge First Financial is owned by a not-for-profit foundation. With no private shareholders, we can use excess earnings to support the students rather than the shareholders.

What happens when your child finishes high school?

Once you provide  your child’s Verification of Enrolment in a post-secondary program, you can begin to withdraw contributions, grants and income on both.

What happens if your child does not enroll in post-secondary?

You can maintain your plan for up to 35 years in case your child has a change of  mind. Or you can change the beneficiary so one of your other children can use the funds.  Alternatively, you can withdraw the income as an Accumulated Income Payment, or transfer your earnings to your RRSP, provided there is room.  Regardless, your net contributions are returned to you.

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Learn more by visiting Robyn Falkovitz (Knowledge First Financial) at the Fall Virtual Bump, Baby & Toddler Expo, October 16-17, 2021.