Sep
10
2018
As the kids head back to school, we have been answering many questions regarding Registered Education Savings Plan (RESP). We believe September is a great time to sit down with your advisor and discuss you RESP goals.
Here are 3 things you should know about RESPs:
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Can I use RESPs towards any school?
- As the job market becomes more diversified, a wide variety of trade schools and specialty colleges are eligible. Click here to review qualifying institutions.
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What happens if my child doesn’t go to school?
- You can withdraw your contribution amount tax free any time. Any grant in the plan will be returned to the government if the account is closed. Any investment income that was made within the RESP can be rolled into your RRSP on a tax-deferred basis provided you have the RRSP contribution room.
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How much does the government contribute?
- The Canada Education Saving Grant (CESG) matches 20% of the annual contribution, up to $500 per year. For example, if you contribute $2,500/year you will receive the max grant of $500 per year.
If you have any questions regarding your RESP contribution room or how the account will be taxed at redemption, give us a call (905-713-6450) or email us at info@carruthersfinancial.ca, we are here to help.
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