Not only does this type of plan allow you to save and invest your money, tax-free, to pay for school, you can also collect up to $7,200 in government grants to help you reach your goal. You don’t need a PhD to see why a guaranteed return like that is awesome.
The only question you need to ask yourself is which type of RESP to open. There are 2 paths you can go down:
👹👹👹 Group RESPs have been around since the 1960s. When you open a group RESP, you lump your education savings in with thousands of other parents. In our view, these plans are outdated. They have
- very high fees
- the investment returns have traditionally been poor
- if for some reason your child does not continue their education beyond high school, you can lose all your investment gains as well as thousands in fees.
😇😇😇 Individual RESPs give you a lot more flexibility.
- your money is not lumped in with anyone else
- the fees are generally much lower and you are free to select investments with better performance potential
- if your child doesn’t use the money for school, you can often transfer the money to another child or to your own RRSP without any penalty
There’s also the question of figuring out exactly how much to contribute, when, and over what span of time. In order to answer those questions, we built the best financial planning platform in Canada. A financial plan from Planswell is designed to cover every area of your financial life, including the costs of post-secondary education for the kids in your life — whether it’s a son, daughter, niece, nephew, grandchild or family friend.
Early to bed and early to rise is timeless advice. But if you really want your kids to be healthy, wealthy and wise, we think planning for their post-secondary education is equally important.