How long can an RESP remain open?

An RESP may remain open for up to 36 years after the date when it was entered into. In the case of a beneficiary who is eligible under the Disability Tax Credit, these plans may be extended up to 40 years. Canadian LIC often refers to the example of Emma, who used her RESPS later in her years to return to school. This demonstrates to many people the flexibility and long-term benefits associated with keeping an active RESP for the full term.

The RESP allows lots of time to decide. The plan may remain open for up to 36 years in order to afford an opportunity for your child during times when they are truly ready to enroll in post-secondary education. One Canadian LIC client, Thomas, appreciated the year his son finally began studying culinary arts after a few detours from an earlier-chosen career path.

Yes, certainly! If you have more than one child, the funds under the RESP can be transferred to another sibling without any kind of penalty, bearing in mind that none of the contributions are in excess of the lifetime contribution limit. For example, the oldest child in one of our Canadian LIC families decided they didn’t need to go to college, so they transferred that RESP to their younger daughter, who wanted to go to college.

If you wind up an RESP and do not subsequently transfer or roll over the payments into an RRSP, then any amount you received by way of government grants will have to be returned. In addition, the income that has accrued in the plan may also be subject to taxation and other forms of penalties. Canadian LIC once helped a family go through this process, ensuring that they were aware of all their options to lessen their loss as much as possible.

You can invest up to $50,000 for each beneficiary over the life of the RESP. Any unused grant room is carried forward, so clients, for example, Jennifer and Mark, are often urged to make extra contributions to maximize the CESG and increase their child’s education fund.

The CESG will match 20% of your annual contributions, up to $500 per year, with a lifetime limit of $7,200 per beneficiary. Canadian LIC can frequently set up a contribution schedule for our clients in order to maximize these grants. For instance, when Sara wanted to catch up on missed contributions for her daughter, we planned so she could maximize receipt of CESGS prior to age 18.

Yes, RESP funds can be used for a variety of educational programs, including full-time and part-time studies at eligible educational institutions. One of the client stories was about how a family used the RESP to go toward a special type of trade school for their child to be educated in, emphasizing the flexibility of the RESP.

The power of regular contributions over time can really help you maximize your RESP. Canadian LIC says to set up regular deposits, so you’ll make consistent progress toward that $50,000 limit. It worked for one of our clients, David, who was late in his granddaughter’s childhood when he began contributing, but was able to amass a good education fund for her.

Withdrawals made under the Educational Assistance Payments (EAPS) for education purposes are taxed at the beneficiary’s tax rate, which is usually lower during their student years. This was indeed a relief to a Canadian LIC client who could finance his son’s education with the least impact of tax, as his income level was lowered because his son is a student.

You can stop contributing if you come across any kind of financial hardship without closing the RESP. The contributions you make will continue to grow, and the grants you previously received will continue to be included in the plan. Canadian LIC has helped numerous families go through such situations and secure the educational savings of their children, even though they may be going through ups and downs in their financial position.

You can commence withdrawals—this is when they are known as Educational Assistance Payments, or EAPS—once children are enrolled in an eligible post-secondary program. Canadian LIC suggests to clients, as it would to the Nguyen family, to keep all required documentation handy, like confirmation of enrollment, as this makes it easier to withdraw money for their child’s post-secondary education and allows their children access to the funds at the time of need.

If your child receives a scholarship, congratulations! This will not impact the RESP account; you will be free to apply the RESP toward other charges not covered by the scholarship. Canadian LIC recently helped a family in which the daughter was a full tuition scholarship winner, and those living expenses and book expenses were taken out of the remaining RESP money.

Yes, you can use your RESP in countries other than Canada, but make sure the country has an eligible educational institution. This one point made a world of difference for the Patel family, clients of Canadian LIC. Even clients who have been really nervous about saving have learned to withdraw from our RESP smoothly when their daughter chose to enroll in a famous arts institution in France.

You can definitely alter the investment strategy of an RESP based on your risk tolerance and time frame until your child starts their education. Canadian LIC will often review a client’s chosen investment selection with changes in the markets and changes in education timing, as we did for the Thompsons, to ensure the investments stay aligned with the objective.

Contributions over the lifetime limit of $50,000 per beneficiary are subject to a penalty. Canadian LIC has assisted many clients in rectifying an over-contribution by having their clients withdraw the over-contributed amount and avoiding further penalties.

To maximize the grants, contribute at least $2,500 a year to receive the full Canada Education Savings Grant (CESG) top-up of $500 a year. Additional programs, like the Canada Learning Bond (CLB), provide even more grants for lower-income families. Canadian LIC worked with families like the Martins, establishing an achievable monthly investment plan that fits their budget while maximizing government grants and bonds.

Yes, any family members or even friends can contribute to an RESP. We’ve seen lots of accounts here at Canadian LIC, such as the extended Lee family, where grandparents, aunts, and uncles all come together to contribute to a child’s education fund. Applied in the proper scenario, this makes the best use of the RESP.

Choose a provider that offers choice in investment selection, low fees, and great customer service. At Canadian LIC, we assist our clients in comparing different RESP providers and focus on the provided options that match their specific needs and preferences. We did just that for the Kim family, who needed a provider that allowed frequent contributions from various family members.

Under a family RESP plan, you can have more than one beneficiary related to your name, while an individual plan is for a single beneficiary. A family plan best suits parents with more than one child, as it will be easy to keep a record of the savings in education. Canadian LIC advised the Green family to set up a family plan, which became an efficient way to manage their children’s education funds collectively.

To open an RESP, you will need the beneficiary’s SIN(Social Insurance Number) and the provider’s choice. Canadian LIC helps new customers at every step of this process, where you understand your options and the benefits involved. We helped the Carter family lay the groundwork for their child’s educational future by choosing the right plan for them and making their first contribution.

At Canadian LIC—The Best Insurance Brokerage, we understand that planning for your child’s education requires flexibility and informed decision-making. We are here to work with you through the associated complications with the Education Savings Plan in Canada, allowing you to choose wisely for your family’s future. Whether you are starting for the first time or simply want to adjust your existing plan, our team is here to offer you advice and support every step of the way.