Benefits of Extra Contributions | Registered Education Savings Plan (RESP)
RESP’s (Registered Education Savings Plan) are an important part to saving for your child’s educational future. The week I came home from the hospital with my son, I made an appointment to set up his RESP account.
The cost of post secondary is only increasing, and I don’t want to subject my son to a bunch of student loans when his time comes. Tuition and books (on top of living expenses) are costly as it is, I can’t imagine what it will be like in sixteen more years.
I do have a certain amount transferred to my son’s RESP account every month, but I am always looking for ways to increase his balance. Each RESP account has a maximum contribution limit of $50,000 and I want to do my best to reach it.
One way to increase your RESP contribution is to use your tax refund!
I consider my annual tax refund from the Government, a “bonus” cheque. In the past I used to blow that money on things I really didn’t need (clothes, fancy dinners out, and that really expensive purse) and now that I’m a mother, I want to invest it into my child’s future.
Every dollar makes a difference.
The Benefits of Extra Contributions Towards Your Registered Education Savings Plan (RESP)
There are the benefits of The Canada Education Savings Grant, Canada Learning Bond and the provincial savings in British Columbia, Alberta, Saskatchewan and Quebec.
With The Canada Education Savings Grant The Canadian Government will top up your RESP contributions by 20% (up to $500 per year) with a lifetime maximum of $7,200 per eligible child. Qualifying families could also receive up to 40% on the first $500.
The Canada Learning Bond is something that you have to qualify for. There will be subsequent instalments of $100 for each child until they are 15 years old. The Primary Caregiver’s income must be eligible to receive the National Child Benefit Supplement, which is included in the Canada Child Tax Benefit, and is generally paid to families with a low to moderate income.
Confused? Don’t be a Heritage Education Fun representative can explain it all for you and help you get your child’s RESP account open.
It’s never too late to start saving.
There are tax benefits with RESPS. When your child does go to post secondary or a trade school (what qualifies at the time), the gains are taxable in the student’s name. However, students typically have high exemption status, low income, and any taxes they will pay should be lower.
If in the end your child does not use the RESPs, you are able to transfer them to your RRSP`s, nothing goes to waste. Your money is your money.
To find out more about your provincial benefits of contributing to an RESP, contact Heritage Education Funds.
Start Early. Save Often. Stay Invested.
Win With Heritage Education Funds
Win $20,000 in contributions towards RESPs to be given away! It’s back once again! Our Annual RESP Draw offers you a chance to win 1 of 8 contributions of $2,500 towards a Heritage Education Funds RESP plan. Draw date is December 31, 2014. You can enter here.