[...] decided to use the RESP program which allows up to 20% of your (after tax) deposit annually will be matched by the government, [...]

[...] Registered Education Savings Plan (RESP) [...]

[...] Registered Education Savings Plan (RESP) [...]

[...] Registered Education Savings Plan (RESP) [...]

Thank you very much!

Suthida

I have experienced a significant gain in a RESP account (for our daughter), of which my wife and I are subscribers.

Because of this, I’d like to confirm whether the below is still true or if the $50k amount transferable to a RRSP account is for each of the plan subscribers (meaning $50k each)? If $50k is max, can this $50k be evenly split between my wife and myself’s RRSP account or can we determine how we divvy it up?

RESP funds can be transferred to an RRSP account (max $50k) if not utilized after it’s maximum lifespan.

Also, for any leftovers in the RESP after the transfer of the $50k to a RRSP, is the entire amount taxed at the child’s hand

1) once he/she graduates
2) when the plan is folded after 25 (or was it 31) years

Or can the withdrawal of the remaining amount be distributed across years in the child’s hands to minimize the tax consequences?

Thank you.

[...] house, I do it all. I pay all the bills. I track all the spending. I manage the investments, TFSAs, RESPs and RRSPs. I am not, however, controlling about it. I do it because I enjoy it and Brian is [...]

Actually, CST real average return is about 3.2%, which is far below 8.5% they use to calculate “Illustrated Maturity Value” of my 2008 statement. Buying bond with high MER, I am not optimistic that CST can provide return they projected to parents. Anyway, I think I have to stick with CST.

Thank you again,

If you have basically 10000 earning about 4% in safe investments now, and you instead want to forfeit 3000 (7000 left), then how much do you need to earn to ‘catch up’? It ends up being about 7.75%-8% or so. That would involve a huge amount of risk that late in the game, and what would happen if a year or two before she goes to school we have another 2008 in the stock market?

I’m not usually one to recommend CST, but in this case I just don’t think it makes too much sense to jump ship now that you are this far in.

My plan converted to an individual plan in CST just before I collapsed it. As far as I was aware, unless you pay out the units amount owning then you still use your enrollment fees, but I’m not certain on that one since my plan was being collapsed for other financial reasons. You may want to give their customer service line a call and ask how it works.

Keep in mind you’ve done a great thing for your daughter giving her a head start that not a lot of other children will have. It’s a great gift that I’m sure she will appreciate.

Contributions Net of Plan Fees $5,308
Canada Education Savings Grant $1,470
Interest Income $950
Enrollment Fees $2,000

Current Balance = $9,728
—————————————————————————————-
Details of Plan
Plan Started 2002
Contribution Amount $1,050.00
Your Contributions are Made Annual
Contributions Remaining 10
Number of Units 10.000
=============================================

Option one:
Transfer it to TD eFund RESP, I will loose $2950 (enrollment fee $2000 + Interest Income $950), and start a balance at $6778 at TD, then continue to contribute $1050 annually in next 10 years. I am wondering if TD account could catch it up when my daughter is 18 if I leave it with CST, say CST return is 4%, TD eFund return is 8%, I know the risk, it is not guaranteed, but…let’s say 10 years long run return and I am a lucky father. I know enrollment fee is not earning any income in CST.

Option two:
As mentioned in some posts, do a “conversion” and park the current balance in CST, and open a new TD-eFund RESP. Can somebody explain how to do a “conversion” as I cannot find it on CST website?

Option three:
Leave it with CST and pay 10 remaining contributions until 2018.

I am not good at math, but as good parent as all of you. we do this for our kids to pursue their future without too much financial pressure when they reach 18.

If you were me, which option you think is the good one.

Much appreciated,

[...] are huge advantages to using RESPs, two of the most significant [...]

And for the record, I’d sooner invest in madoff than a group RESP. At least Madoff would admit he’s out to stick it to his investors now.

To the scammer above: Also I’m counting on the volatility of the stock market for right now… my son is only 2.

Not entirely true. You don’t need a group resp to invest in GICs or a simple bond market, so can invest in them without paying a large fee for the privilege to do so (either on joining, or on exiting). Also, it’s not accurate to say that the headaches of the market won’t affect your money growth — how much are GICs paying? 1.5%? There’s market-related reasons for that, it’s not seasonality.

The full list of promoters is available here: http://www.hrsdc.gc.ca/eng/learning/education_savings/publicsection/how_do_I_find_an_RESP_promoter.shtml

I’ve taken down most of my spreadsheets from Google because there was no way I could see to make them useful and prevent them from being inadvertently modified which tended to break them.

So, since you are a person after my own heart, you may be glad to know I have updated the SS.

YOU can decide the maximum lifetime contribution…
YOU can decide your annual contribution…
YOU can decide how many years to run the scenarios…
YOU can decide the maximum lifetime CESG.

So, now it is a lot more flexible and I fixed the error you spotted. I had previously used the $2,000/year limit over 18 years and thus there would never have been a case to run out of CESG contributions.

I’m going to be assembling almost all of the spreadsheets I’ve created and putting them on Canadian Money Forum.

If you want to get an early preview of this one (even if it is only to check out to see if I’ve made any mistakes) please let Frugaltrader know and I’ll pass it on to him to forward to you.

Thanks for the interest and the keen eye.

Also, correct me if I’m wrong, but don’t the first few rows of your spreadsheet assume a CESG grant for each $2500 contribution? In the first 4 or 5 rows you would actually run out of grant money midway through year 14.