RESP

Registered Education Savings Plan/RESP

Children are the hope for our future. It is no wonder why we want to make sure that our children have the best possible tools for succeeding in their personal and professional lives.

Most parents hope to be able to provide access to a post-secondary education. However, with all the budget cuts made to education through various levels of government, parents are faced with the ever-increasing costs of advancing their children’s education.

Statistics Canada has revealed that university tuition fees have risen 126% in the past ten years ! Projections indicate that in 2017 it will cost more that $76,000.00 for a four-year university program for a student living away from home.

It used to be that a post-secondary education was a choice. Now it seems to have become a necessity to ensure and keep a place in the job market. According to some Canadian studies, 2 out of 3 jobs now require a post-secondary education.

What is a Registered Education Savings Plan ?

Commonly known as an RESP, this is a financial vehicle to help you save for a child’s post-secondary education. Like an RRSP, the federal government allows you to accumulate investment income on a tax-sheltered basis until the funds are withdrawn from the plan.

Anyone who has an interest in a child’s future education can contribute to an RESP, whether it is the parent’s grandparents, godfather, godmother, uncle, aunt, or even a friend.

How do I obtain a government grant ?

In January 1998, the federal government created a Canada Education Savings (CES) Grant program. This program is primarily intended to encourage parents to save for their children’s post-secondary education.

The Grant provides an extra 20% on top of the annual contributions paid into the plan, up to $400 per year beneficiary.There is a limited lifetime of $7,200 per beneficiary.

The Grant accumulates on a tax-sheltered basis in the RESP. The Grant becomes part of the educational assistance payments when the beneficiary pursues his/her post-secondary studies.

The CES Grant is paid directly into the beneficiary’s education savings plan. We look after submitting the application for you;

In order to be eligible for the Grant, the designated beneficiary must have his/her own social insurance number, and must be a resident of Canada;

The Grant is available for children aged 17 and under. For beneficiaries who are 16 or 17 there are conditions that must be satisfied for the Grant to be paid.

Is it possible to carry over the CES Grant ?

If no contributions are made for a given year, or if the contributions made are lower than the amount required for the maximum CES Grant ($400), the unused portion of the CES Grant is automatically carried over to subsequent years doe as long as the beneficiary remains eligible. The total annual Grant may not exceed $800.

What happens if the beneficiary does not pursue a post-secondary education ?

You may choose a new beneficiary, transfer the accumulated investment income to your RRSP, or withdraw the accumulated income.

Introducing a New Registered Education Savings Plan / RESP

The Rite Team is pleased to offer you a new RESP program that is designed to help parents systematically set aside funds each month to finance their children’s post- secondary education. This new addition to the RESP market provides for a very advantageous education bonus to be paid by one of our sponsor companies when the monthly deposits expire in order to support the parent’s efforts to provide for their children’s future.

This bonus is in addition and added to the grants paid by the federal government as part of the RESP and the investment generated by the accumulated amounts. The beneficiary is eligible to use this bonus as an Education Assistance Payment.

How does this RESP program work?

The program involves four parties: the individual who is making the contribution, the beneficiary of the RESP, our business partner, and a trustee who holds the amounts invested in the plan as required by the federal government for the purpose of the RESP.

All the advantages :

You may accumulate all of the necessary funds to finance a child’s post-secondary education.

This RESP is eligible for a government grant equal to 20% of the annual contributions to the RESP (up to $400 per year).

An education bonus can be reached up to 15% of the contributions to the RESP, increasing the income paid to the Educational Assistance Payments.

There is flexibility to change the plan’s beneficiary.

Have a chance to watch your money grow sheltered from tax.

The investment income is transferable to your RRSP in the event the beneficiary chooses not to pursue a post-secondary education.

Withdrawals of the contribution are tax-free.

Statistics Canada has projected that in 2017 it will cost more that $76,000 for a four-year university program for a student living away from home. University tuition fees have risen 126% in the past ten years!