RESP..yes/no
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Posted on: 22-10-04 14:16:37
RESP is the best way to save for children education as we are adding 20% grant from Govt of Canada on the top of our savings.The most important thing is the type of investment we are doing in RESP which should not only be safe but must give a moderate leval of return.If anybody needs more information ,call me at 416-859-8576 for fair and honest view.
Registered Educational Savings Plans
Quote:
Orginally posted by happy2004
Registered Educational Savings Plans
Registered EDUCATION Savings Plan
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Man's Best Friend 
I need a suggestion,
I am contributing in RESP for both of my kids(3+ and 4 month old). For elder I contribute $2000/yr and for the younger I contribute around $1000/yr. Why I am contributing less for my second kid is because if there is any unused amount from the elder one, it could be passed to the younger sibling. Is it a wise decision?
Thanks
Abhishek
Quote:
Orginally posted by atyagi
I need a suggestion,
I am contributing in RESP for both of my kids(3+ and 4 month old). For elder I contribute $2000/yr and for the younger I contribute around $1000/yr. Why I am contributing less for my second kid is because if there is any unused amount from the elder one, it could be passed to the younger sibling. Is it a wise decision?
Thanks
Abhishek
Depends entirely on what you think they might want to do when they grow up. For the elder one, by the time he/she is 18, you would have accumulated about 45K (if you just started) assuming a return of about 4% compounded and 20% grant. That amount should be just enough for a simple undergrad degree. However, if you want the child (or the child wants) to specialise in any field, this amount, even in today's terms, is not enough.
So if you can afford to put in maximum allowable amount each year for both the children, it is best.
Chandresh
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Chandresh
Advice is free – lessons I charge for!!
Chandresh,
By the time the elder 3+ turn 18, He will get 131K(I took the RESP just after he was born). And for the younger one he will be getting 75K. Thats what is written in the yearly statement what one gets at the year end.
Quote:
Orginally posted by atyagi
Chandresh,
By the time the elder 3+ turn 18, He will get 131K(I took the RESP just after he was born). And for the younger one he will be getting 75K. Thats what is written in the yearly statement what one gets at the year end.
Abhishek,
Its good to note that you have taken RESP's plans for both kids from their early age to get the benefit of compound growth and CESG for full 18 years. However, please let us know if the return ($131K) on the maturity of the plan you are going to get is guaranteed? Does the yearly statement show this $131 k as guaranteed maturity value OR simply a projected value based on some hypothetical interest rate? Because, what I could understand that if you are investing $2000 annually and maximizing the CESG grant, you have to continuously get more than 10% return every year in order to get that maturity value.
Please clarify.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
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