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A PARTNER YOU CAN TRUST.

WHO CAN HELP YOU SAVE FOR YOUR CHILDREN’S EDUCATION ?. A PARTNER YOU CAN TRUST. Your Child’s Future. Would you like to ensure that your children or grandchildren have the necessary financial resources to go to university?. Is Education a Priority ?.

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A PARTNER YOU CAN TRUST.

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  1. WHO CAN HELP YOU SAVE FOR YOUR CHILDREN’S EDUCATION? A PARTNER YOU CAN TRUST.

  2. YourChild’s Future Would you like to ensure that your children or grandchildren have the necessary financial resources to go to university?

  3. Is Education a Priority? Studies shows that a post-secondary education and training are increasingly important. • In the 2000s: • 65% of new jobs, or almost 2 out of 3, will require a post-secondary education. Source: Statistics Canada

  4. The Cost of Post-SecondaryStudies • First three years of medicine, starting in 2008, dependent single student These amounts do not include lodging fees In fact, full-time students in Canada paid $14,500 on average to cover a year of post secondary expenses in 2003-2004. That's roughly $58,000 for a four-year program. Source:CanLearn

  5. What Are YourChoices? • Let your children go into debt to pay for their education • Pay or borrow the amounts required while your child is at university • Save now and be able to offer this opportunity to your child later on. The solution?

  6. The Solution • The RegisteredEducationSavings Plan, commonlyknown as the RESP, is the best solution to save for a child’seducation.

  7. Free Certificate Anyone can open an RESP: • Whether you’re parents, grandparents, legal guardians, family members or friends, you can open an RESP and offer a gift to a child! • In addition, when you open an RESP, the child will receive a lovely certificate explaining that someone close to them is taking care of their future.

  8. WhyChoose the RESP? • To save for your children’s education • To take advantage of the Education Savings (CES) Grants • To accumulates in a tax sheltered plan • To access your contributions • To invest in high-performance investments

  9. Government Certification • The RESP is registered with the government of Canada so that the money saved for school can grow tax-free, until the person designated as the RESP beneficiary enrolls in a post-secondary school.

  10. Components of the RESP

  11. Contributions How much can I save? • For all RESPs for the same beneficiary: • Per year: • No annual plan contribution limit • Lifetime limit for the plan: • Maximum contribution plan limit of $50,000 For how long? • Contributions can be made up to the plan’s 31st anniversary • Plan duration: 35 years

  12. Help Your Money Grow • Once your RESP is opened, you have many investment possibilities: • Guaranteed rate fixed-term investments • Mutual funds: • Bonds • Canadian equities • U.S. and international equities • Our RESPs also include a guarantee for sums invested

  13. Components of the RESP

  14. Accumulated Grant Room • Since 1998 (or the year of the child’s birth) • Each child accumulates $400 (prior to 2007) or $500 in grant room per year. Thereafter, regardless of whether or not an RESP is open in the child’s name. $400 / year $500 / year 1998 2007

  15. Grants * Family income for 2009 – Income bracket revised annually

  16. Components of the RESP

  17. Income Accumulatedincome on contributions and on grants: • Non-taxable as long as there are no surrenders • Will be taxable to the beneficiarywhenEducational Assistance Payments (EAP) are made (as income). • If the childdoesn’t go to university: • Will be taxable to the subscriberwhenAccumulatedIncomePayments (AIP) are made. Contributions: • Surrenders are non-taxable

  18. Components of the RESP Subscriber Parents; Grand-parents Beneficiary Child; Grand-child

  19. Plan Duration • Maximum contribution period = 31 years • Maximum duration = 35 years End of contributions Close of plan Opening of plan COTISATIONS 35 Year 0 31

  20. Investment in an RESP Deposit: $2,000/year Interest rate: 6% Taxation rate: 50%* Non-registered RESP+ CES grant RESP

  21. Education Savings Plans MY EDUCATION DIPLOMA

  22. IA RESPs • Offered as an individual or family plan • Minimum deposit of $100 • Minimum PAC of $25 ($10 per beneficiary for the family plan) • Investment funds available MY EDUCATION

  23. MyEducation • Flexible contributions allowed • Eligible to government grants • No annual contribution required • Access to your capital at all times • Tax-free withdrawal of contributions • Possibility to change the plan’s beneficiary at any time ADVANTAGES

  24. IA RESPs • Offered as an individual plan only • Minimum mandatory PAC of $25 per monthuntilDecember 31 of the beneficiary’s 17thbirthday • Minimum lump-sumdeposits of $100 • Pre-determinedinvestments DIPLOMA

  25. Diploma • Offer an education bonus of up to 15% of the contributions to the RESP will increase the income paid for education • Eligible to government grants • Access to your capital at all times • Withdrawals of contributions are tax-free • Possibility to change the plan’s beneficiary at any time ADVANTAGES

  26. Diploma – Education Bonus $100/month 0 18 Years $100 x 216 months (18 years) x 15%(bonus according to age) = $3,240

  27. IA RESP Loan

  28. You wouldlike to increaseyour contributions, but yourcurrent budget does not allowit. • Hereis a solution thatletsyouincrease the amountsavailablein your RESP and receive the maximum governmentgrant, whilestayingwithinyour budget! RESP LOAN

  29. RESP Loan • Available for an amountequal to yourcontract’scurrent contributions (up to 100%) • No interest or repaymentrequireduntil the end of the plan • However, itcanalsoberepaidatany time

  30. Your RESP loan: $1,000 $200 Your contribution: $1,000 $200 $2,400 How it Works RESP GRANT By depositing $1,000, you obtain a $2,400 investment foryour child’s studies!

  31. How we compare to the Competition

  32. Financial institutions and fund companies IA’s RESP and the Competition • Annual administration fee (between $25 and $50) IA RESPs No annual fees

  33. Scolarship Plans DIPLOMA and MY EDUCATION IA’s RESP and the Competition • EAP eligibility in the second year of studies and at age 19, with proof of school success • EAP determined by the foundation • Accumulated income paid to the foundation EAP: Educational Assistance Payments AIP: Accumulated Income Payments EAP eligibility in the first study session, with proof of registration EAP determined by the subscriber Possibility of AIP The advantage of an IA RESP: FLEXIBILITY

  34. The Education Savings Plan (RESP) • For the 20% (or more) grant • For the education bonus of up to 15% (Diploma) • For tax-sheltered accumulation • To maximize the grant through the RESP loan • To diversify your investments (My Education) • For the flexibility of changing beneficiaries • For the possibility to transfer investment income to your RRSP, if your child does not pursue a post-secondary education

  35. THE RESP is the idealsavingsvehiclefor children’s post-secondaryeducation!

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