Are you considering opening an RESP? There’s no time like the present.
After all, if you have some savings laying around, why not put it towards your child’s future?
Here are six key reasons why an RESP may be a great vehicle to help you pay for your children’s education.
There’s a misconception out there that when you contribute money to an RESP, it doesn’t belong to you. That’s false.
While group RESP plans pool the income of all subscribers into one plan, when you open an individual RESP, the money is all yours. Any income and grants you receive in the individual plan belong to you. You can do with the funds as you see fit. You can decide the best use of the funds to benefit your child the most.
Individual RESPs provide your child with the utmost in flexibility.
If COVID-19 has taught us anything it’s that life is unpredictable. Your child might plan to enroll in a particular program, but plans can always change at the last minute. That’s why flexibility is key.
Does your child want to only go to school part-time in their first couple of years? That’s no problem. With an individual RESP, your child can withdraw less money in the first two years and more money later on as needed.
Figuring out what you’re going to do for a living in high school can be tough. You might plan to be a graphics designer only to decide to switch career paths and become an accountant. The good news is that RESPs are there for you no matter what career path you decide to follow.
Whether you decide to go to college, university or get a skill in the trades, RESP funds can be used towards any program that lasts more than 13 weeks, supporting your child no matter the career they choose.
Individual RESPs put you in the driver’s seat of your child’s RESP money. You decide when and how the funds are withdrawn. This lets you withdraw your funds in a way that maximizes your child’s education money to make it last as long as possible.
What if your child doesn’t decide to pursue post-secondary studies?
That’s always the risk and fear when you set up a group RESP for your child – you could lose out on all your investment income if your child doesn’t go to school. That’s no fun!
With individual RESPs, the money is yours no matter whether your child goes to college or university or doesn’t at all, giving you one less thing to worry about.
With an individual RESP, you can contribute as much and as often as you want to your plan (up to the maximum contribution limit of the plan). The sky’s the limit!
If you don’t have an individual RESP for your child, what are you waiting for? By setting up a RESP for your child today, you can give them a brighter future tomorrow.