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Thread: RESP's

  1. #1
    Proud to be Canadian, eh! ZumbaQueen's Avatar
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    Hi everyone!

    I have a quick question about RESPS. We adopted 3 kids and finally got all the docs in order..... we knew they had RESPs that and we got all the accounts set up at our branch...my question (according to what I've read) that the govt contributes a max of $1000 annually to each account. Do I need to contribute the same amount? Not quite clear on the jargon.

    Thanks!
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    Frosh Canuck EvilTofu's Avatar
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    Congrats on the adoption! :D

    The government contribution is a matching and I think it's only $500 a year. The government matches your contribution by 20% up to $500 a year per child until he/she turns 17 to a maximum of $7,200 matching lifetime. If you don't put money in RESP, you will not get the money. Total maximum contribution is $50,000

    i.e. When you save $2,500 a year for each child, they would each get additional $500 from the government. (If you can only save $1,000, you'd get only $200 from the government) $7,200 is 20% of $36,000. So when you contribute more than $36,000 in total (across 15 years), the government will no longer give you more money. But you can still save up to $50,000 each child and the earning from the money will not be taxed.

    Please check the exact limits, It depends on where you live.
    Last edited by EvilTofu; Wed, May 10th, 2017 at 09:56 PM.
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    Smart Canuck
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    I think maybe where you got the $1,000 idea is if your child did not have contributions and grants in a certain year you can make double contirbutions in subsequent years and receive 1,000 grant until they are caught up on grants. We adopted a little girl when she was almost 5 -she did not have an RESP, so for the years age 5-10 we were able to make double contributions and receive double grants for the 5 years that were missed. Check the details on the govt website or with your bank.
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  4. #4
    Proud to be Canadian, eh! ZumbaQueen's Avatar
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    Thank you for the information!
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    Congratulations on the adoption and thank you for giving some children a loving home!
    Last edited by Colsgirl; Tue, May 23rd, 2017 at 08:37 PM.
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    Dancing bean paste bun Ciel's Avatar
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    The federal government currently has a call for concepts (for organizations) related to Canada Learning Bond that is open until January 16. 2018. However, the summary lists the granting information in relation to RESP contributions made by parents.

    ESDC administers two education savings incentives linked to RESPs:

    1. The Canada Education Savings Grant (CESG), which consists of a basic grant amount of 20% on the first $2,500 in annual contributions to an RESP. This education incentive is available to all eligible Canadians regardless of family income. An additional amount of CESG of 10% or 20% is available to children from middle and low income families. The CESG is available until the calendar year in which the beneficiary turns 17. The maximum lifetime amount, including the additional amount of CESG, is $7,200.
    2. The CLB, which is available for children from low-income families born in 2004 or later. This education savings incentive consists of an initial payment of $500 plus $100 for each year of eligibility, up to age 15, for a maximum of $2,000. No personal contribution is required to receive the CLB.
    https://www.canada.ca/en/employment-...d-concept.html

    If you read Gail Vaz-Oxlade's money books, she advises that readers look into individual or family plan RESPs, not subscriber ones (read the terms as there could be restrictions on qualifying schools or programs for plan participants).
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    Also regarding those subscriber plans, can deny payment if student drops a class (no longer full time).
    Reading also that for RESPís, possibility as using them for downpayment on a house for the students going to school - I imagine house might need to b in students name but still a great start if you can find other students to rent bedrooms to.
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    Hi everyone,

    just a comment, on "RESP for possibility as using for downpayment on a house" - not quite sure on this one but rather using RESP as part of payment for board and lodging in a university campus. I think the latter is more reasonable like using RESP fund as payment for tuition, books, board and lodging etc.

  9. #9
    CaNewbie tomdrake's Avatar
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    The subscriber plans people are referring to are called Group RESPs, which you should avoid. Since you mentioned setting up at a branch, you're probably all good. Other low-cost options include robo-advisors (JustWealth is my pick for RESPs) or buying ETFs through a broker.

    I had written an article on a particular group resp provider, but they hand-delivered a threat to sue me, so I unfortunately had to take the post down. I did publish a very similar article without calling out one company directly: maplemoney.com/invest-group-resps/

  10. #10
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    We use CST.org and have had no issues with them ... one son is going to Uni in September and the other has 2 years to go. The money saved is transferable between the two of them which I think makes it easier, we can also keep on saving until the younger one goes to uni.
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  11. #11
    CaNewbie tomdrake's Avatar
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    Most people that stay with Group RESPs will be happy with them, they are an investment and the CESG makes everything look good. The biggest problems come when people want to go elsewhere, the fees get ridiculous. At the very least, consider it similar to mutual funds, you can do fine investing with them for a couple decades, but that doesn't mean there wasn't an option that could give you a better return due to lower fees.
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