What are Registered Education Savings Plans (RESPs)?
RESP’s are education investment plans that help you accumulate money for a child’s post-secondary education. Virtually all full-time post-secondary education is eligible for assistance through RESP’s. Under these plans, you can contribute up to a maximum of $4,000 each year, and a cumulative total of $42,000 per child. Parents, grandparents, aunts, uncles or anyone else who wants to help fund a child’s education may contribute to an RESP. There are many advantages to investing in an RESP: • While contributions to the plan are not tax-deductible, any income earned accumulates tax-free until withdrawn; income withdrawn is normally taxed in the beneficiary’s hands – a tremendous opportunity to shift taxable income to a lower-income student. • No age restriction to transfer to another beneficiary – so if the child decides not to pursue post-secondary education by the age of 21, another child within the same family plan can use the plan to pursue his or her education. • If the intended bene
