You need to know this BEFORE you buy a Registered Education Savings Plan!

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By: Joanna Muir

I remember thinking that Kindergarten was a long way off never mind Post Secondary Education but here I am with the end of the school year looming and my girls going into Grade 1 and 3 in September. Graduation and Post Secondary will come quickly.

Saving for children’s education is similar to saving for our retirement because it seems like such a long way off and true, 18 years is a long time. That’s why there are some advantages to saving sooner.

  • More time for your investment to grow.
  • It’s more manageable to start sooner rather than wait until the tuition and residence are due.
  • There are government grants available…but you only get the money when you start saving.

The government Registered Education Savings Plan (RESP) is a great way to get started. Generally, there is a 20% Canadian Education Savings Grant (CESG) available to all Beneficiaries participating in the program each year. It is calculated on your RESP deposits to a maximum of $500 per year (NB: Save $2,500 in a RESP each year and you will receive a $500 CESG) to a lifetime maximum of $7,200 CESG.

Here are the ‘Good to Knows’!

Our recommendations:

  • Set it up at the same place you already bank or have a savings/investment relationship.
  • Set up automatic monthly contributions – easy on your budget and less scrambling at the end of the year.
  • Let family know that you have RESP’s for your children (grandparents love to buy birthday gifts but they also appreciate the opportunity to contribute to your children’s future).
  • Wherever you open a RESP, ask questions to understand all the fees you may be paying such as: Account Maintenance (+ taxes), Administration, Transaction, Withdrawal, Management, Management Expense Ratios (MER), Membership and Depository. These can add up AND take away from your child’s education savings.

What if you set up a plan with an organization and now want to transfer it elsewhere?

  • Check out the Canadian Government Transfer Form HRSDC SDE 0088 Registered Education Savings Plan (RESP) Transfer Form (and Guidelines):
  • Meet with the new savings institution, complete the paperwork and open the account and have them facilitate the transfer.
  • Transfer ‘In Kind’ rather than a withdrawal so that it is properly transferred from RESP to RESP remaining sheltered and within program rules to avoid any tax consequences.

About Joanna: She would be behind in planning for her retirement if it wasn’t for a moment in her twenties when she tested a retirement calculator and learned that she needed to be putting away a lot of money now to retire the way she wanted. With that motivation behind her she started learning about about loans and mortgages and bought her first home at twenty-four and hasn’t looked back. You can connect with Joanna at

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