Registered Education Savings Plan (RESP)
A Registered Education Savings Plan is a tax-sheltered account designed to help you save for your child's post-secondary education. In addition to your contributions, the Federal Government will contribute toward your child's plan. That's why an RESP is a great choice to help your child obtain the education that they need and deserve.
Free Money?
Each year you contribute to an RESP, the Government will also contribute up to $500 per year into the RESP. Low-income families may be eligible to receive more. Your child must be under the age of 17 to receive these Government grants.
How is the money taxed?
Contributions to an RESP are not tax-deductible. However, the money within the plan grows on a tax-deferred basis and is taxed in the hands of your child when the money is withdrawn for eligible education expenses. While attending college or university, your child will likely pay very little tax on any withdrawals. If your child decides not to pursue post-secondary education, then you can transfer the RESP balance, less the Government grants, to your Registered Retirement Savings Plan, provided that you have sufficient contribution room
To learn more, or to establish an RESP for your child, please contact David Mason.
