Invest in a child's education
Invest in a child’s education Registered education savings plan (RESP)
Post-secondary education can set your child or grandchild on the path to a better career with better pay and the personal satisfaction and confidence that comes with experience and achievement. You can help.
Why investing in a child’s education makes sense More than ever, the job market requires advanced degrees and specialized skills that can only come from higher learning. At the same time, the cost of education is continually rising and there’s uncertainty about what it may cost students in 15 or 20 years. It’s estimated three out of four new jobs require post-secondary education in the form of a university degree, college diploma, trades school or apprenticeship programs. What is certain is that planning and preparing early for a post-secondary education it is more vital than ever. The bonus? The government will help you as you save.
What RESPs can do RESPs do more than cover the costs of tuition.
They can be used for other expenses related to education, such as housing, food, books, technology needs and travel – items especially important for students attending school away from home. Governments help out. The federal government
offers the basic Canada education savings grant (CESG) – a grant of 20 per cent on the first $2,500 contributed to an RESP each year for a total of $500 (lifetime limit of $7,200.), a nice top-up. You could also qualify for additional CESG assistance – up to an extra 20 per cent on top of the basic grant. Some provinces help as well. With RESPs, there is no annual maximum
contribution amount, although there is a $50,000 lifetime maximum of allowable contributions. You are allowed to carry over some unused CESG-eligible contribution room to catch up later if you want to (although there are some restrictions on how much can be caught up in a single year). RESPs offer a lot of flexibility for your money if the beneficiary decides not to pursue postsecondary education. You can hold the plan open for 35 years in case the beneficiary’s plans change; roll the growth over to a registered retirement savings plan (RRSP) if you have contribution room; designate another beneficiary; or withdraw the contributed money1. ¹ Withdrawing contributed money can have tax consequences and result in the repayment of any grants on these contributions to the government. Consult your tax professional.
The Big Tax Benefit: Inside vs Outside an RESP Earnings on contribution CESG + growth Personal contribution $100,000 $80,000
$30,326
$60,000
$20,000 $0
$12,769
$15,640
$37,800
$37,800
Inside RESP
Outside RESP
88-2020Q
$40,000
Total value of investment in 18 years
$80,894
$53,440
This example is based on a six per cent average annual rate of return compounded monthly with $175 (which allows you to maximize the government grant) contributed at the beginning of each month over a span of 18 years. Assumes a marginal tax rate of 40 per cent for investments held outside an RESP. Growth of investments within an RESP are tax-deferred. Canada Education Savings Grant (CESG) is 20 per cent of total annual contributions. Note: Since individual circumstances vary, an investment representative should be consulted.
Talk with your Quadrus investment representative about a plan that works for you.
The years go by all too quickly and before you know it your child is a teenager. Start saving for their education today and benefit from the power of compound growth. The sooner you start to invest the longer your money has time to grow.
Making the most of an RESP
1. Start early.
2. Contribute regularly – automatically.
3. Take advantage of government grants.
4. Keep the money in the plan until it’s needed for educational purposes. Contribute early and automatically $40,000 $35,000 $30,000 $25,000 $20,000 $15,000
88-2021Q
$10,000 $5,000 $0
2
4
6
$100 PAC for 18 years
8
10 Years
12
14
16
18
$200 PAC for 9 years
By investing $100 a month for 18 years your $21,600 principal investment grows to $38,929. Investing $200 a month starting nine years later means your $21,600 principal investment grows to only $28,691.
The contributions used in this example are made at the beginning of each month. It assumes a six per cent effective annual rate of return compounded monthly. Note: Calculations above do not include Canada Education Savings Grant (CESG) payments.
More information Visit these government of Canada websites for details on RESPs and the grant assistance available:
www.canlearn.ca
www.cra-arc.gc.ca
Make your investment decisions wisely. Important information about the Quadrus Group of Funds is found in Fund Facts. Please read this carefully before investing. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Unit values and investment returns will fluctuate.
Quadrus Group of Funds is offered exclusively through Quadrus Investment Services Ltd. Quadrus Investment Services Ltd. and design and Quadrus Group of Funds are trademarks of Quadrus Investment Services Ltd. 46-8631-3/15
Post-secondary education can set your child or grandchild on the path to a better career with better pay and the personal satisfaction and confidence that comes with experience and achievement. You can help.
Why investing in a child’s education makes sense More than ever, the job market requires advanced degrees and specialized skills that can only come from higher learning. At the same time, the cost of education is continually rising and there’s uncertainty about what it may cost students in 15 or 20 years. It’s estimated three out of four new jobs require post-secondary education in the form of a university degree, college diploma, trades school or apprenticeship programs. What is certain is that planning and preparing early for a post-secondary education it is more vital than ever. The bonus? The government will help you as you save.
What RESPs can do RESPs do more than cover the costs of tuition.
They can be used for other expenses related to education, such as housing, food, books, technology needs and travel – items especially important for students attending school away from home. Governments help out. The federal government
offers the basic Canada education savings grant (CESG) – a grant of 20 per cent on the first $2,500 contributed to an RESP each year for a total of $500 (lifetime limit of $7,200.), a nice top-up. You could also qualify for additional CESG assistance – up to an extra 20 per cent on top of the basic grant. Some provinces help as well. With RESPs, there is no annual maximum
contribution amount, although there is a $50,000 lifetime maximum of allowable contributions. You are allowed to carry over some unused CESG-eligible contribution room to catch up later if you want to (although there are some restrictions on how much can be caught up in a single year). RESPs offer a lot of flexibility for your money if the beneficiary decides not to pursue postsecondary education. You can hold the plan open for 35 years in case the beneficiary’s plans change; roll the growth over to a registered retirement savings plan (RRSP) if you have contribution room; designate another beneficiary; or withdraw the contributed money1. ¹ Withdrawing contributed money can have tax consequences and result in the repayment of any grants on these contributions to the government. Consult your tax professional.
The Big Tax Benefit: Inside vs Outside an RESP Earnings on contribution CESG + growth Personal contribution $100,000 $80,000
$30,326
$60,000
$20,000 $0
$12,769
$15,640
$37,800
$37,800
Inside RESP
Outside RESP
88-2020Q
$40,000
Total value of investment in 18 years
$80,894
$53,440
This example is based on a six per cent average annual rate of return compounded monthly with $175 (which allows you to maximize the government grant) contributed at the beginning of each month over a span of 18 years. Assumes a marginal tax rate of 40 per cent for investments held outside an RESP. Growth of investments within an RESP are tax-deferred. Canada Education Savings Grant (CESG) is 20 per cent of total annual contributions. Note: Since individual circumstances vary, an investment representative should be consulted.
Talk with your Quadrus investment representative about a plan that works for you.
The years go by all too quickly and before you know it your child is a teenager. Start saving for their education today and benefit from the power of compound growth. The sooner you start to invest the longer your money has time to grow.
Making the most of an RESP
1. Start early.
2. Contribute regularly – automatically.
3. Take advantage of government grants.
4. Keep the money in the plan until it’s needed for educational purposes. Contribute early and automatically $40,000 $35,000 $30,000 $25,000 $20,000 $15,000
88-2021Q
$10,000 $5,000 $0
2
4
6
$100 PAC for 18 years
8
10 Years
12
14
16
18
$200 PAC for 9 years
By investing $100 a month for 18 years your $21,600 principal investment grows to $38,929. Investing $200 a month starting nine years later means your $21,600 principal investment grows to only $28,691.
The contributions used in this example are made at the beginning of each month. It assumes a six per cent effective annual rate of return compounded monthly. Note: Calculations above do not include Canada Education Savings Grant (CESG) payments.
More information Visit these government of Canada websites for details on RESPs and the grant assistance available:
www.canlearn.ca
www.cra-arc.gc.ca
Make your investment decisions wisely. Important information about the Quadrus Group of Funds is found in Fund Facts. Please read this carefully before investing. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Unit values and investment returns will fluctuate.
Quadrus Group of Funds is offered exclusively through Quadrus Investment Services Ltd. Quadrus Investment Services Ltd. and design and Quadrus Group of Funds are trademarks of Quadrus Investment Services Ltd. 46-8631-3/15
