Millennial Parents’ Guide to Financial Planning
Is the RESP outdated?
Will it actually be able to help our children 18 years from now?
Both excellent questions and we are so glad you asked.
Let’s go Back in Time
The RESP started back in 1972 and was used to help parents save money for their children’s university education when a four-year degree was under $20,000.
But What About Your Children?
According to an RBC study, the current cost of a one-year university, including residence and miscellaneous expenses, is $17,359 (yikes!).
The Cost of Education Continues to Rise
According to statcan, the total cost of a four-year degree for a child born in 2021 starting university in 2039 can expect to spend…
$131,768 living in residence and $64,659 living at home.
Now, back to where we started.
Is The RESP Outdated?
For a child born in 2021 (starting university in 2039) the maximum RESP grants parents will receive when their child is 17 will be $7,200 – if they deposit $36,000 into the RESP. That’s it, nothing more.
Long story short, the total RESP grants will only be 5.4% of the entire university costs for a child living in residence in 2039 and 11.1% if they live at home.
Where Does The Rest Come From?
The rest has to come by chance from the stock market.
Education is Changing
Education is going global and online.
The RESP is a government program with government rules on where our children can go to school, what they can study and how the money you saved can be used.
In other words…
What if Your Child Wants a Different Path?
What if they don’t want to go to university right out of high school?
What if they want to travel abroad for school?
What if they want to start a business?
Well, There is Another Way!
Child Plan is the fastest growing alternative to the RESP, and the only tax-free investment parents can open for their children in Canada. The money you invest with Child Plan can be used to pay for any education program in the world without any government restrictions or to support any other financial need and dream in life.
Today’s parents are not just looking to safeguard their child’s future; they want to give them the freedom to decide what that future entails.