Registered Educational Savings Plan in Canada

Parents (and certain other relatives such as grandparents) are permitted to contribute up to $4,000 per year per child to a Registered Educational Savings Plan (RESP). There is an overall lifetime contribution limit of $42,000 per beneficiary. Although there is no deduction for a contribution which is made to an RESP (unlike an RRSP) the amount in a plan thus earned income on a tax-deferred basis. The federal government established that Canadian Education Savings Grants (CESG) which a government contribution equal to 20% of the annual RESP contribution to a maximum of $400 per child per year into a lifetime maximum of $7,200 per child.

The 2007 budget proposes to eliminate the $4,000 annual contribution limit to an RESP. The budget also proposes to increase the lifetime limit form $42,000 to $50,000, the annual Canada Education Savings Grant (CESG) from $400 to $500 and the maximum CESG from $800 to $1,000 annually (in case of unused grant room from a preceding year). However, the lifetime CESG will remain the same at $7,200 per beneficiary.

Learn more about these services: Financial Planning, Retirement Planning, Investment Planning, Estate and Tax Planning, Life Insurance, RESP

Please note: Ms. Mimi Tang, offers financial planning and insurance services as an independent representative, under Mimi Tang Wealth Management and Consulting LTD. and these services are offered independently of PEAK Securities.

PEAK Securities inc., an IDA registered, full service investment broker, limits its responsibility to investment products such as stocks, bonds, and mutual funds. PEAK Securities inc. is a member of the Canadian Investor Protection Fund.

Call Mimi Tang at (604) 926-8068 or email mtang@peakgroup.com
for financial planning in Vancouver, British Columbia, Canada.