Saving For School Just Got Easier
by Joe Bowen
December 23rd, 2010 06:05 AM
Do you have young children or are you planning on having children? Maybe you are a grandparent and want to help your growing grandchild financially. In either case saving for a future education is an important consideration.
The Registered Educational Savings Plan (RESP) was improved in the 2007 budget. The plan was already quite attractive but now it is exceptional.
In a nutshell: The RESP allows you to invest money for your child’s education, tax deferred, until they use it to pay their tuition. The government will contribute an additional 20 per cent (up to $500 per year) in the form of a grant. This money will be invested along with your contribution.
A $208 per month contribution, along with the 20 per cent grant, will go a long way by the time graduation day arrives. If the investments average even seven per cent during that period your child would have over $100,000 saved for their education. Good news considering estimates state a degree from UBC 18 years from now will cost approximately $100,000.
Annual RESP contribution limits have been eliminated and the lifetime contribution limit has been increased from $42,000 to $50,000. The government grant of 20 per cent will be added until the lifetime maximum of $7,200 has been reached.
So, whether you are a parent or a grandparent, an RESP may be something you should consider. With government grants and the ease of monthly contribution plans it has never been easier to give a child a chance at a bright future.
There are many specialty plans out there, some good and some not so good. You should consult a professional who understands the products before you act. The time is now to make it happen.
Joe Bowen is a registered Mutual Fund Representative with Dundee Private Investors Inc. (“Dundee Private Investors”), a Dundee Wealth Management company. This is not an official publication of Dundee Private Investors and the views (including any recommendations) expressed in this article are those of the author alone, and they have not been approved by, and are not necessarily those of, Dundee Private Investors.
Listen to Joe on CFUN AM1410 Sundays 5 to 5:30pm
www.joebowen.org 604-603-2336
Copyright North Shore Magazine Issue Dec 07-Jan 08
The Registered Educational Savings Plan (RESP) was improved in the 2007 budget. The plan was already quite attractive but now it is exceptional.
In a nutshell: The RESP allows you to invest money for your child’s education, tax deferred, until they use it to pay their tuition. The government will contribute an additional 20 per cent (up to $500 per year) in the form of a grant. This money will be invested along with your contribution.
A $208 per month contribution, along with the 20 per cent grant, will go a long way by the time graduation day arrives. If the investments average even seven per cent during that period your child would have over $100,000 saved for their education. Good news considering estimates state a degree from UBC 18 years from now will cost approximately $100,000.
Annual RESP contribution limits have been eliminated and the lifetime contribution limit has been increased from $42,000 to $50,000. The government grant of 20 per cent will be added until the lifetime maximum of $7,200 has been reached.
So, whether you are a parent or a grandparent, an RESP may be something you should consider. With government grants and the ease of monthly contribution plans it has never been easier to give a child a chance at a bright future.
There are many specialty plans out there, some good and some not so good. You should consult a professional who understands the products before you act. The time is now to make it happen.
Joe Bowen is a registered Mutual Fund Representative with Dundee Private Investors Inc. (“Dundee Private Investors”), a Dundee Wealth Management company. This is not an official publication of Dundee Private Investors and the views (including any recommendations) expressed in this article are those of the author alone, and they have not been approved by, and are not necessarily those of, Dundee Private Investors.
Listen to Joe on CFUN AM1410 Sundays 5 to 5:30pm
www.joebowen.org 604-603-2336
Copyright North Shore Magazine Issue Dec 07-Jan 08
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