The modern world is a competitive place and all parents desire for their children to be successful. As the world changes so quickly, there are also many obstacles to success, but the fact remains that a good education can set up a young person for the rest of their lives. Unfortunately, many parents struggle to save money for their children’s higher education, and this is where a Registered Education Savings Plan -heritage RESP account can really save the day and offer opportunities.
A good education and a good career are intimately tied together. With the right education, a young person can find the right path in life. The right career starts out with a good education, but it’s also important to be able to pay for this education, and this is where many parents do need help.
A Registered Education Savings Plan is a scheme that allows parents to save money for their child’s further education after secondary schooling. In this sense, it is like a sheltered investment vehicle. Consider the benefits:
1. Rest Easier
One of the biggest things that keeps parents awake at night is financial pressure. Sometimes, it’s just hard to put food on the table and pay the rent without also having to save money for their children’s education. Being able to use a RESP means that every parent can rest easier in the knowledge that their children’s education and future is going to be taken care of. It’s an easy, convenient, and effective method of putting aside money for children as they grow.
2. The Saving is Much Easier
Have you ever felt the stress of pulling out large chunks of money from the bank just to pay for something unexpected? It can make anyone feel stressed out. Saving money into a RESP makes the saving a lot easier. In this sense, it’s easier to save money gradually over a long period of time, rather than trying to pull money out all at once.
3. Tax Benefits
Unlike other schemes, RESPs don’t attract the same sort of taxes. As the tax-free threshold is applied, the money in the heritage RESP largely ends up not being taxed at all or being taxed at a very low rate. This means more funds for a post secondary education and less stress for parents.
4. Access the CESG Financial Benefit
One of the biggest benefits of placing money into a RESP is that it allows a student to access The Canada Education Savings Grant (CESG). This is additional money that is granted by the Canadian government to assist post-secondary students with their further education and means that each student will have access to more funds.
There is no doubt that a good education most often leads to a good career. When a child has a good education at the highest level, they generally have access to more opportunities. The RESP is a scheme that allows parents in Canada to save money for their child’s education over a long period of time, taking advantage of tax benefits and other government backed financial assistance.