Top Tips for Avoiding RESP Withdrawal Penalties
When it comes to saving for your child’s post-secondary education (PSE), nothing is as easy and convenient as a registered education savings plan (RESP). An RESP is a savings plan that helps Canadians save, tax free, for their child’s PSE. Through an RESP you can contribute $2,500 annually, up to a lifetime maximum of $50,000.
Even on good days, parents can struggle with the financial pressures of parenthood. From diapers to daycare to additional financial obligations like bills, it can be difficult to think about saving for a child’s post-secondary education.
But it’s important for parents to save for their child’s academic career after high school. Saving for their university or college degree in advance means the child may not need to work during the school year and can concentrate all their efforts on studying. Starting an education savings plan also means they will not be saddled with debt, or as much debt, when they graduate.
Education Savings Plan Tips for Canadian Newcomers
When it comes to getting a post-secondary education, Canada is home to some of the top universities and colleges in the world, and deciding which post-secondary institution to enroll in can be daunting. Saving for your child’s education can also feel overwhelming. Fortunately, there are Federal and Provincial education plans designed to make obtaining a Canadian post-secondary education affordable. The catch is that Canadian newcomers need to be aware of the different programs in order to participate in them. In Canada, there is no federal department of education or national system of education. Instead, each province or territory has its own system. While the education systems are very similar, there are some variations.