RESP deadline is approaching!

Dawn Luhning |

As the 2016 year end approaches, so too does the RESP "deadline". December 31 is the last day to make a contribution to your Registered Education Savings Plan (RESP) for your child or grandchild's year of age this year.

If you've never done an RESP before now, you can do two contributions before year end. The maximum contribution currently per year of age is $2500. So if you have a four-year old, you essentially have room for $10000 in his/her RESP. BUT you can only do two contributions per year - one is for the current year of age and the other, for a previous year. So for the four-year old, you can contribute $5000 before December 31 and as your advisor, I keep track of which years we have contributed to and when you've caught up. This contribution would be for the fourth and third year of age for this child. Next year, you could do $2500 for the child's age 5 and do a catch up of $2500 for age 2 and so on.

Each $2500 contribution gets a minimum 20% grant from the government which is credited to the account the following month. It's a great opportunity to maximize your contributions to your childrens' or grandchildrens' education which increases significantly each year. It's one of the most inflationary costs out there. Every dollar will certainly help.

So if you have an RESP, now might be the time to revisit your contribution limits and see how much you can contribute to help bring your account closer to its maximum value. If you don't have an RESP established yet, there's no time like the present to get one started. You can do lump sum contributions or contribute on an affordable monthly basis. Your choice. 

Let's meet and discuss.

~ Dawn