First you were putting on their diapers. Then you walked them to their kindergarten classroom. You helped them with their math homework. You listened to their loud music through the walls. Then you bought their cap and gown. Are you ready for what comes next?
College tuition can cost over $6,000 per year.1 If you have multiple children, you are looking at a lot of money if you are planning on helping them out. How can you make this process easier?
A Retirement Education Savings Plan (RESP) is one option.Contributions to these accounts receive a minimum 20% match from the Canadian Education Savings Grant up to $2,500 per year, which is $500 of free money. If your income is low, you can receive a 30-40% match on the first $500. Setting up a trust account is another option to help pay for college.
Saving for college can appear daunting, but it doesn’t have to be. Your financial advisor can help create a roadmap so you can make progress in steps. Before you know it, your kid will be out of college, and you’ll be putting on diapers again – on your grandkids.
RESPs are Registered Education Savings Plans that grow tax-free until the child is ready for university, college or a vocational institute. The student usually pays little or no tax on those funds when they are withdrawn at the student's lower...
The TFSA is a registered savings account that allows taxpayers to earn investment income tax-free inside the account. Contributions to the account are not deductible for tax purposes, and withdrawals of contributions and earnings from the account are not taxable.