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Secure Your Child's Future with a Trustworthy Education Savings Partner

Ensure your child or grandchild has the financial resources for university. Learn about the RESPs and government grants available to support their education. Start saving now to secure their future!

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Secure Your Child's Future with a Trustworthy Education Savings Partner

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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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