How are you saving for your children's education (or your grandchildren's)?
The average cost of University tuition in Canada is $7,437 in 2016-17. It tripled in the last 20 years and it's expected to triple again in the next 20 (see sources below). If you want your kids to go to school like you did, how will you pay for it? The Capital Group Registered Education Savings Plan can help.
The Capital Group Registered Education Savings Plan (RESP) features tax sheltered investment growth to provide for post secondary education costs.
You can invest in a diverse selection of investment funds through major investment fund companies -- and if one child decides not to use it, you can even transfer the funds to a different family member for complete flexibility.
Unlike an RRSP, you don't get to deduct the payments that you make. But they grow tax sheltered -- so you don't pay tax on the investment income while it's in the plan. When it comes time to take the money out, it's taxed in the student's name, so they'll likely pay little to no tax on it.
With the Capital Group RESP, both you and your spouse can contribute to this plan, and you can even take them out yourselves if it turns out that your kids aren't going to post-secondary school. They can be used by anyone enrolled in full time study at a post secondary institution in Canada (or at a specified institution abroad) he or she can draw on the funds to defray such education-related costs as tuition, books, travel, food or accommodation.
The most compelling part of the Capital Group RESP, though, is the Canada Education Savings Grant. With this, the Federal Government will match up to 20% of your contribution, with an annual contribution limit of $2,500. If you've contributed less than your maximum ($50,000), then you can contribute up to $5,000 per year. The net result: you could get up to $7,200 in free grants from the Federal Government (the maximum allowed)!
Contact us today to get your annual RESP contributions started -- and take maximum advantage of the grants available!
Capital Group Tax Free Savings Account (TFSA)
Do you have a place to grow your money tax free? That's what the Capital Group Tax Free Savings account was built for.
Do you have one spouse (or common-law partner) with a pension, and one without? You may want to consider a Spousal RRSP!