Parents spend much of their children’s lives promoting the value of school. Increasingly in today’s society, higher education acts as a gateway to even greater opportunities. But if children do work hard and achieve their educational goals …. who’s going to pay for it?
Registered Education Savings Plans (RESPs) have been around since 1974. The popularity of the plans surged when then Minister of Finance Paul Martin introduced the Canada Education Savings Grant (CESG) to incentivize families to save for their children’s education. If parents took initiative and invested for their child’s education, the government would help.
Although the plan has been tweaked over time and there have been a few nuances that have made the CESG even more attractive to low-income families, the main premise has remained the same. The federal government will match up to 20% of all contributions to a maximum of $2,500 per child per year. So, a $2,500 contribution would garner a $500 CESG payment, typically at the end of the month following the month of the contribution. Imagine that: it’s essentially a 20% guaranteed return on your investment!
RESPs:
The time
is now!
By
Jason A. DeJean, CFO, PFP, EPC, CPCA
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