A Registered Education Savings Plan(RESP) is a government registered savings plan that helps you save for a child’s post secondary education.
Limitations: There is no limitation on the number of contributors to a single plan or beneficiary. Although the limitation as to how much you can contribute to a beneficiaries plan tax-free over a lifetime is $50,000. The beneficiary also has to be a legal resident of Canada at the time of designation.
How it works: No matter of a family’s income the government will contribute a basic 20% of ALL contributions made to your RESP through the Canada Education Savings Grant(CESG). This comes with a lifetime limit of $7200 that the CESG will contribute to one beneficiaries plan and a $500 limit they will contribute annually. Although, if you missed a contribution than the limit gets carried on to the next year and so on.
Therefore, by taking advantage of an RESP you will be capitalizing on government money that will be very valuable for paying for your loved ones education.
Visit the Canadian Revenue Agency Website for more info:
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