Phasing Out RESP’s

03/20/2013

I always thought what a great idea to encourage parents to set up something early to start saving for your child’s future! The government will give you $500 to start it off! 

As a mom of a new born the last thing I was thinking of was setting up a savings account. I was a little more focused on applying for EI and breastfeeding. After a little of the fog lifted I decided to go through all the papers I had received at the hospital. Then I remembered the RESP and the $500!

I didn’t want to be the mom that need to explain to their child in 18 years that I did not apply for the free $500 the government was giving. It may not seem like much when you look at the cost of tuition today. But any money is better then no money! Even if it is just to help to buy one text book (OK maybe two). So this little push of $500 hanging over my head helped me get motivated to set up an Education Savings Plan!

They make it so simple now. Just check the box at the hospital to say you want your new born’s SIN card. Set up an appointment with someone that handles RESP’s, at the bank or through an investment company. You don’t even have to invest anything else just open an account and they will give you the $500. But if you do provide something after such as a monthly contribution the government will also contribute a bit, it may be a small amount but hey it’s free! And then three more times they will deposit $100 into the account at 8, 11 and 14 years. Hey it’s better then nothing!

And in order to withdraw when they are older they just need to take some type of secondary schooling, they don’t just need to attend medical school!

Now with that said the government has decided to phase out the RESP. What does this mean for future children and their investment into future education?  I think that perhaps if this $500 wasn’t there for me, that little boost to get me setting something up, perhaps I might not have started saving for my children’s future education, yet.

What does this mean for children born after 2013?

Will their parents not get the boost they need to kick start their secondary school education savings? 

Did you know that a child is more likely to attend secondary school if they know that there is a savings for them. It becomes sort of an expectation to attend. 

What are your thoughts on the phasing out of RESP?

Have you started saving?

I would like to know is the government planning on doing something different? Hey, maybe they are paying for all of their educations? RIGHT!

Looking for more information on RESP’s have a look at the governments website: http://eae.alberta.ca/funding/aces.aspx

Or want to talk to someone about setting up an account before it’s to late! Talk to Shey at http://www.primerica.com/sheyhennig