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How to Save for Your Child's Education Using an RESP

If you've ever wondered whether you're saving enough for your kid's education — or whether you're even saving in the right place — this episode is for you.

Sara breaks down everything you need to know about Canada's Registered Education Savings Plan (RESP): the account that lets your money grow tax-deferred and comes with a federal government grant of up to $500 a year, per child. If financial support for your kids' education is important to you, RESP accounts are worth understanding well.

In this episode, you'll learn:

• How the federal government grant works — including the deposit rules that could cost you the grant entirely as your child approaches their mid-teens
• Why maximizing the grant isn't always the right goal for every family, and what questions to ask yourself before deciding how much to contribute
• The two different "maximum" amounts parents confuse all the time (and why it matters if you're co-parenting)
• The three distinct pools of money inside every RESP — and how each one is taxed differently on the way out
• What to do if you haven't started yet and feel like you're behind
• Why your investment strategy inside an RESP should look different from your RRSP — and when to start shifting it as school approaches
• The case for joint ownership, and the one situation where Sara recommends against it

Whether you're just starting out, playing catch-up, or heading into the teen years with a half-funded account, this episode will help you get clear on where you stand and what to do next.

Useful links: 

information on the government grant (Canada): https://www.canada.ca/en/services/benefits/education/education-savings/savings-grant.html    

information on U.S. citizens, tax treatment of RESP plans (parents and children): https://www.bdo.ca/BDO/media/Misc-Documents/Tax-Consequences-for-US-Citizens-and-Other-US-Persons-Living-in-Canada.pdf

information about 529 accounts (U.S.): https://www.savingforcollege.com/intro-to-529s/what-is-a-529-plan#:~:text=A%20529%20plan%20is%20an,programs%20and%20student%20loan%20repayments.

information about costs of post-secondary education in the European Union: https://education.ec.europa.eu/news/tuition-fees-at-european-universities 

The information in this podcast is intended for general information and illustrative purposes. For advice relevant to your specific situation, connect with a qualified financial planner, lawyer, or accountant before making any changes to your situation.

Sara's designations: Certified Financial Planner (CFP), Chartered Financial Divorce Specialist (CFDS), Certified Divorce Financial Analyst (CDFA).

For more of Sara's writing, find her on:

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