It’s the middle of the summer and that means that many are starting to think about, “Back to School.”
For families with kids going off to university or college, this means it is time to think about taking money out of an RESP.
Did you know that there are two parts within an RESP? One part has rules regarding how and when you can make withdrawals? And if you don’t know or follow these rules, you may lose the grants? All
$7 200– Scary, eh? If you don’t believe me, The Globe and Mail published articles on RESP’s and these issues most recently on July 28th, July 21st and also March 30th of 2023. The stories in the Globe (especially the July 21st article “Some bank employees need to go back to RESP class”) are not outliers or one-off cases.
Recently at a networking event I met a woman who closed her son’s RESP after he was done two years of college. Because she funded the first two years with the contributions she made only, and he was no longer in school when the RESP was closed, the cheque she got back was $7 200 lighter than expected. The grants went back to the government instead of her son just because she either wasn’t informed or chose to ignore these rules.
As a financial planner, it’s my job to ensure you are educated on the opportunities and pitfalls of every financial decision you make… be that mortgage options, insurance options, saving and investing options and more. When it comes to RESP’s, wouldn’t you like to know these rules before your child goes off to school? Would you be interested in another way to both pay for your child’s school (or whatever they need even if they choose not to go to school), give them a financial education at the same time, all without the risk of grants being taken away?
If you would like to discuss which option(s) is/are best for you, you can give me a call at 647-302-0151 or set up a time by following https://calendly.com/mjhfinancial/30min.
#respregs #resprules #FinancialEducationMatters