Prepare now for Higher Education Costs

The government has money for your child’s education. Want it?

The cost of post-secondary education is getting higher. We only need to read the latest news stories to see how this is affecting more and more Canadians. The fact is, the trend has been happening for more than a decade, and it will almost certainly continue. Another fact is that the more education you have, the more likely you are to earn a significantly higher income during your lifetime. What can parents and caregivers do to ensure their children reach their full potential?

The simple, effective answer is a Registered Education Savings Plan. AnRESP lets you (or anyone who wishes to contribute, such as grandparents,etc.) contribute to a registered plan for a child. In addition, you willbenefit from the Canada Education Savings Grant, which is essentiallythe Government adding a payment of 20% to the savings, depending onhow much is put into the Plan each year. The Canada Learning Bond is alsoavailable under certain circumstances.

The RESP is not like an RRSP. The money you put into a child’s Plan isnot tax-deductible. However, all money within the Plan grows tax-free, andwhen it is needed, it is the student who withdraws it under their name,presumably at a very low tax rate. The total amount you can deposit intoa Plan for each child is $50,000. RESPs aren’t just for university, either.The Government of Canada defines eligible programs as, “a course of studythat lasts at least three consecutive weeks, with a minimum of 10 hoursof instruction or work per week.” That means everything from doctoral programs to special courses at career colleges. To get the maximum benefit – and to make it easy to set up your RESP – all it takes is a phone call to Luminus Financial. We’ll be pleased to help you determine how much in government funds, you could receive, and to get your plan established. When you think of any gift you could give a child, opportunity could be the best gift of all.

 

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