The education of your children is a great reason to save and invest; plus, knowing that you have these expenses covered down the road is a fantastic feeling.
If you open a Registered Education Savings Plan (RESP), the Federal Government will actually help you save, with a 20% grant on annual contributions of $2,500. That’s a grant of $500 per year, up to a total $7,200 per child: and we can break that down to a monthly contribution so you stay on track.
As you can see, the math is fairly straight forward to get you to $50,000 (plus, you can access a government grant of up to $7,200)… but what about inflation? Will education costs still be $50,000 in 15 years?
Education costs are rising faster than inflation, so we need to discuss how your money can be invested a way that can keep up with inflation.
Every situation is unique but in our experience, investing in a balanced portfolio with a 15-year time horizon will help you keep up with inflation and provide the financial support your child will need – plus, (on a personal note) we have found that if you let your child know that the account is there for them in the future, this can be very motivational!
It’s a government program, so we can help you navigate the process for withdrawals when the time comes… and it’s always very satisfying for us to help clients with these milestones.
If you’d like to hear more about an RESP and the options that are available to you, reach out to us today.
– Spire Advisors of Assante Capital Management Ltd.
Office locations: Huntsville, Powassan, North Bay, Parry Sound, and Orillia