If you have kids and/or nephews or nieces, today's video is especially for you...
According to MoneySense magazine, experts forecast that the cost of a four-year university education in Canada, including tuition and accommodation, will run upwards of $130,000 by the time today's toddlers graduate from high school.
But if you start planning while your kids are young, the costs can still be affordable. Plus, you'll save them from being burdened with thousands of dollars in student loan debt!
Here are a few ways to start saving:
A Registered Education Savings Plan (RESP) is an excellent place to start.
You can contribute up to $4,000 a year per child, to a lifetime maximum of $50,000.
You don't get a tax break for the money you put in, but the funds grow tax-free. Since withdrawals belong to the student, they're also effectively tax-free since any tax owing is offset by the student's education credit and personal tax credit.
There are two types of RESP's: self-directed and group plans.
Group plans are pooled investments that involve regular monthly payments to a company that manages your funds and guarantees your principal.
But self-directed RESP's are generally considered to be a better investment because they offer greater flexibility and lower fees. They're available at most Canadian financial institutions, and you can choose to invest in mutual funds, stocks, bonds or GICs.
The best thing about a RESP is that it qualifies for the Canada Education Savings Grant that gives you 20 cents for every dollar you contribute up to $2,500 a year per child.
So even if your investments perform badly, you're guaranteed a 20% return on your first $2,500 per year!
Your mortgage can also help fund your child's education. If you would like to learn how, please call us today!
For Vancouver Mortgage Broker related inquiries ~ 604 628 5040.
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Jessi Johnson Vancouver Mortgage Broker Vancouver Luxury Realtor