Education Planning

Registered Education Savings Plans

Most of us want our children and grandchildren to experience the best of what life has to offer - including a good education. However, as university and college tuition costs spiral upwards, it's becoming more difficult than ever before to finance post-secondary education.

That's why it's essential to start planning as early as possible. Developing a savings strategy before your children begin their post-secondary education gives you the power of time - the earlier you begin to save, the more your savings will work for you.

Registered Education Savings Plans (RESPs) are one of the most effective ways to save today for your children's future education costs. An RESP is a registered plan to which you contribute on behalf of a named beneficiary, usually a child or grandchild. As the subscriber, you don't receive a tax receipt for the contributions you make, but the funds grow tax-free in the plan until the beneficiary enters a post-secondary institution such as a college, university or technical institute on a full-time basis. You can make a lifetime total contribution of $50,000 per beneficiary with no annual limit.

Once your beneficiary starts college or university, he or she begins receiving payments from the investment income generated by the contributions and will be taxed on those amounts. The advantage of this scenario is that a student usually falls within the lowest tax bracket, so that the tax payable is minimized.

For more information on RESPs, please contact a ScotiaMcLeod advisor.

The information contained on this website is for use by persons resident in Canada only.