More Great Reasons to Use the RESP
aliko-aapayrollservices.com - Small businessess from 1 to 80 employees outsource your payroll management to us and let us worry about your payroll processing.
RSS Follow Become a Fan

Delivered by FeedBurner


Recent Posts

Tax changes to expect when you’re expecting
2016 Tax Tips for 2015 Filing Year
From Proprietorship to Corporation - When is the Best Time to Incorporate?
Tax Specialists Brief your Clients About CRA Fraud And E-Mail Scams
Bank of Canada cuts rates again

Most Popular Posts

Help your teenager build credit responsibly
Being an Executor of an Estate
Anti-Aging
Student Line of Credit
Principal Residence Exemption

Categories

aliko nutrition store- isotonix
aliko payroll services
canada revenue news and videos
canadian news
CPP ,OAS RRIF ANNUITY
Cross border Tax
Disability awareness and Benefits for disabled
estate planning
FINANCIAL LITERACY
HEALTH & NUTRITION
Home Car Insurance
Income Splitting Strategies in Retirement
INVESTING
kids and money -set your children up for financial success
life insurance
on line safety tips
online safety tips
PAYROLL
Real Estate - Investments / Retirement
RETIRE HAPPY BLOG
Retirement planning
SAVE YOUR MONEY
Save your money
SERVICE CANADA NEWS
small business planning
Tax Information for Students
tax news
tax planning
tax tips.ca
Tech news
TFSA

Archives

January 2016
July 2015
May 2015
April 2015
February 2015
December 2014
November 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013

powered by

MY BLOG

More Great Reasons to Use the RESP

More Great Reasons to Use the RESP
 
 
 
More Great Reasons to Use the RESP
 
 
 
 
Written by Jim Yih
The Registered Education Savings Grant is probably one of the best ways for parents and grand parents to save money for their kid’s education. One of the biggest incentives to putting money into an RESP is the Canada Education Savings Grant where the government will put in an additional 20% for every dollar contributed to an RESP up to a maximum of $2000 contributed per child. Effectively, a parent who puts in $2000 into an RESP would get an additional $400 put into the RESP by the government. That’s like an instant 20% return.
At one time, the RESP plan was very restrictive if the child did not go to school. Today, the plans are more flexible giving a number of options:
1.       If the child does not go to post secondary school, the money can be transferred to a sibling.
2.       Otherwise, the government gets their 20% back, the subscribers get their contribution back and the rest can either be rolled into the subscribers RRSP or it will be taxed.
3.       There is also a provision that allows the subscriber to move funds from the RESP to their RRSP if they have enough RRSP contribution room
Overall, the RESP has become more popular because of the flexibility that has been built into the rules and the ability to access grant money from the government.
Four new reasons to put money into RESPs
Since the release of the new RESP rules in 1998, there are some new programs that may benefit some parents.
1.       Canada Learning Bond. The Canada Learning Bond is for families that qualify for the National Child Benefit Supplement. Generally, this plan is for low to middle income families. If you qualify, your child born after Jan 1, 2004, will receive a $500 bond to go towards the child’s RESP. The government will add $100 per year for the next 15 years. For more detailed information, visitwww.hrsdc.gc.ca.
2.       Additional CESG. Originally, the Canada Education Savings Grant was 20% for every dollar contributed to an RESP per child. Now the CESG is based on net family income. If your net family income was below $36,368, your CESG is now worth 40%. If your net family income was above $36,368 but below $72,756 then you qualify for 30%. For those with a family income greater than $72,756, you still qualify for the basic 20% CESG. For more detailed information, visitwww.hrsdc.gc.ca.
3.       Alberta Centennial Education Savings Grant. For those of us living in Alberta, any child born to an Alberta Resident in 2005 and beyond qualify for the $500 Alberta Grant. The money must go into a RESP and an application must be made through the RESP carrier. The plan also provides another $100 at the age of 8, 11, and 14 under a matching provision. This grant is not income tested. For more detailed information, visit www.advancededucation.gov.ab.ca/aces/
4.       Universal Child Care Plan. In the 2006 budget, the government introduced the Universal Child Care plan which will provide families $100 per month for every child under the age of 6. Although the money can be used for anything under this plan, parents can also use the money to contribute to an RESP to further maximize the return of the money. For more detailed information, visit www.universalchildcare.ca
At the root of all these plans, it is very important for parents to make sure they have their children registered with the government (both provincial and federal).
With tuition fees rising much faster than inflation and wages, it is becoming more and more important for families to plan earlier for children’s education. Often, grandparents are getting involved in helping to plan and partially fund for their grandchildren’s future education opportunities. There are now four more opportunities for families of all income levels to help kick start the education planning process.
 
 
 

1 Comment to More Great Reasons to Use the RESP :

Comments RSS
clearance watches on December-30-14 11:25 PM
You made some decent points there. I regarded on the internet for the issue and found most people will go together with with your website.
Reply to comment

Add a Comment

Your Name:
Email Address: (Required)
Website:
Comment:
Make your text bigger, bold, italic and more with HTML tags. We'll show you how.
Post Comment