Parental Tips Regarding Saving For Their Post Secondary Education – RESP

Parental Tips Regarding Saving For Their Post Secondary Education – RESP 

Post-secondary education is very expensive in North America and will be a nuisance for most parents unless you are rich enough. Obviously, not all children go to university or college but if they do and you If you have no plans for it, you will find yourself in a huge financial burden. This will probably be at a time when most families are finally looking for some financial protection.

Registered Education Savings Plan - RESP - is very important for your financial health if you have children who you think want to go to post-secondary education. An RESP is government-sponsored (Canada is registered with the Customs and Revenue Agency) And it is allowed to grow tax-free. At maturity, the amount paid from the project can be taxed as income to the student.

Projects private companies / individuals (Promoter) Are managed by those who will collect contributions and invest in them accordingly. With a life limit of 42,000 without any tax implications, per beneficiary in each calendar (Student) Can be made up to 4,000. Each student may have more than one plan but the limit per student is too strict.

The most important aspect of RESP is that the government per calendar year (400) I will add 20% to the 17th anniversary of the first students and 20 years. This is the Canada Education Savings Grant (CESG) It is said that any amount paid in it is not included in the annual limit for tax purposes.

The maximum number of students can get from CESG is 00 7200 during the life of this project. No amount of CESG is claimed each year which is credited because up to $ 800 if not previously claimed Can be paid. If the RESP is not ultimately used for educational purposes, any CESG payments will have to be refunded to the government.

To apply, the student must be a Canadian resident and have a social insurance number (SIN) Must be provided to the promoter at the beginning of the project. Also, the individual participant will need to provide their SIN.

Types of RESP projects

There are 3 main types of projects

1. Non-Family - There may be only one beneficiary but anyone (grandparents / grandparents, etc.) can contribute whenever they want but they want to pay as much as possible.
2. Family - There may be one or more beneficiaries as long as it is adopted by a blood relative or individual playing their part. There is no restriction on when and how much is paid (In addition to the implications of higher purchase tax).
3. Group These projects are usually offered by the foundation that has determined how much is paid and when. Each age group will have a special plan and all members will participate. Some complex rules and regulations Are connected and should be thoroughly researched with planners before engaging with them.

Elimination of RESP

When finished / matured, there are many options:

1. The required student does not go to post-secondary education. Contributions are tax-free to the person who created them. The CESG is returned to the government. Any proceeds from the project are subject to taxation Will be.
2. The student enrolls in a qualifying program at a post-secondary educational institution and completes the entire program. Initially, the project can be paid 5000 be, then after 13 weeks until the student remains in the program(Until then, there is no limit to the amount to be paid. These payments are paid for educational assistance (EAP's) is called. Student EI (Job insurance) Can't get or employ program students (An apprenticeship for example) Should not be part of.
3.  Proceeds can be transferred to another RESP. This amount can be paid to a designated educational institution.