Education Planning

Most parents will tell you having children is the most rewarding and challenging experience life has to offer.

From diaper-stage on, your children’s well-being requires considerable financial expenditure. Your financial plan needs to provide for your children’s present and future educational and recreational needs. You may decide to move to a larger home or a neighbourhood with more to offer your family. You’ll want to protect and provide for them, should you become ill, incapacitated or die prematurely. And you will begin to consider, now that you have heirs, the nature and extent of inheritances you will want to leave for your children.

There are so many needs to meet and goals to fulfill. Where do you start?

From diaper-stage on, your children’s well-being requires considerable financial expenditure. Your financial plan needs to provide for your children’s present and future educational and recreational needs. You may decide to move to a larger home or a neighbourhood with more to offer your family. You’ll want to protect and provide for them, should you become ill, incapacitated or die prematurely.

And you will begin to consider, now that you have heirs, the nature and extent of inheritances you will want to leave for your children.

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Higher Education

The Sooner the Better – The earlier you begin to plan for your children’s future education, the better you’ll be able to cover those costs. Bursaries and scholarships may be available when your children are ready to begin

Registered Education Savings Plans – For children who go on to post-secondary education, RESPs (Registered Education Savings Plans) can make a big difference.

An RESP enables the subscriber to make contributions on behalf of someone who intends to seek higher education, including themselves or their children. Growth in the plan accumulates on a tax-deferred basis. There is no minimum or maximum annual contribution to an RESP.

The lifetime maximum contribution for each child is $50,000.

The Canada Education Savings Grant (CESG) and provincial programs may provide additional funds. For more information about RESPs, CESG and provincial programs in your area contact your Investors Group Consultant.

Investment Accounts – If you begin a portfolio designed to save for university or college while your children are babies, you’ll likely favour equity type investments (such as stocks and equity mutual funds), since over the long term, the stock market can provide better rates of return. If you’ve waited until the children are older, you may not have the time frame to ride out the ups and downs of a more aggressive equity portfolio so you may be inclined towards more fixed-income investments.

Post-secondary education. Bursaries may be conditionally tied to family income levels that could disqualify your children, while scholarships may require high academic performances. Your children could take out student loans to finance their education, but this could result in them carrying huge debt loads.