Patty James 2016-09-11 13:20:08
The Canadian government provides assistance to parents who are looking to save funds for their child's education. This enables them to be a productive member of society, while parents can see their child prosper.
It's best to not place them under severe debt when it comes to their education ask online to CST Consultants.
Therefore, the RESP option becomes a viable one for parents to consider especially those who are planning on saving funds.
Let's take a look at how the Canadian government provides assistance to its citizens under the RESP and why it's beneficial to one and all.
Up To $7200 Of Contributions
There is a 20% kicker implemented on the first $2500 added to one's RESP account (per year). All additional dollars are not counted and depend on the person.
Once the $2500 is met, the government boosts it by 20%.
This number goes up to $7200 from the government. It's recommended to take advantage of these contributions as it can be a significant chunk of what a child will be paying later on.
For those who are considering RESPs, it's best to look at how quick the results will come through. The premise is to have the government contribute on top of what's already being placed.
Using numbers, it becomes clear how beneficial this can be.
Imagine having to foot the $7200 out of your pocket. How long would it take? It might add a couple of years to the savings period.
With RESP, you're able to cut past this and make sure the government provides assistance as required.
Taxation Is Lower For Student
The funds being put in RESP will not be taxed. This is important because it will be taxed later. Now, how is this beneficial to anyone? What is the point of waiting on taxation?
Once the funds are in your child's hands, it will be taxed on their income.
If they don't have a job, it will be based on that rate.
As one can imagine, this provides a lot of savings on the funds compared to putting them in your personal "savings" account and letting it sit.
RESP is a must for those who want to take advantage of how the system is setup. This is the best way to provide your child with the leverage they require moving forward into their post-secondary years.
It is a comprehensive solution with an incredible contribution from the government.