The GP&A Wealth Management Team
June 25, 2021
Registered Education Savings Plans – A Great Way to Save for Your Child’s Future
Post-secondary education is often a pretty good investment in your kid’s future, providing them additional knowledge, skills, and experiences that they will be able to use for the rest of their lives as they transition into adulthood.
That being said, this opportunity doesn’t come cheap, and the increase in the cost of education shows no signs of slowing down. For those who have intentions of assisting with (or fully covering) these costs for their children or grandchildren, this can be a daunting goal; and with the cost of other living expenses continuing to rise, unfortunately it will become a more difficult goal to reach for many.
One of the best ways to help maximize funds for post-secondary education is through making contributions to a Registered Education Savings Plan; these plans are a tax-deferred investment account that allow for investment growth, shift the burden of tax on the investment growth to the beneficiaries of the plan (who are usually in a lower tax bracket than the contributor), and most importantly attract a generous grant from the government for contributions made to the plan.
The following link is an excellent resource which introduces some of the basics around RESPs, including key terminology and facts. And while making contributions and building up assets within the RESP may seem like the most important part in reaching the goal, equally important is properly winding down the account as the beneficiary draws out the funds, so be sure to speak with a member of the Girard, Pilkey & Associates Wealth Management team for guidance on an approach most suitable for you