Planning for your child’s and grandchild’s education
The little bundle of joy that you brought home from the hospital will be college -bound before you know it and it doesn’t’ come cheap – post secondary education can cost in excess of $6,000 per year! Thankfully, there are some options to help you to support your kids through this costly time.
A Registered Education Savings Plan (RESP) is a savings plan where the Canadian Education Savings Grant offer a 20% match on your contributions up to $2,500 per year. Lower income families can benefit even more. The money then grows tax free in the plan and can be used for your child to withdraw when they are ready to go to college.
A TFSA is a tax freesavings account is another good option to grow your savings faster, as contributions are not deductible for tax purposes and withdrawals from the account are not taxable.
How about the grandparents?
If you are a grandparent, you may be wondering about the best way to help to support your grandchildren from a financial perspective. Helping them to save for their education is a great way to show your love and is certainly more enduring than buying disposable gifts every time you see them.
You may find that you have more disposable income at this stage of your life and want to put it to worthwhile use. Investing in one of the plans mentioned above is an easy way to watch educational savings grow quickly and you will be rewarded by knowing that you have directly contributed towards the future success of your family.