RESP – The Registered Education Savings Plan

I stopped and checked. I have dedicated a lot of electronic ink on the subject of the Registered Education Savings Plan (RESP). Specifically my “interactions” with TD and associated Universities over my daughters’ academic careers.

Setting Up

When I first set up my girls’ RESPs, I was a neophyte. I was unaware that I had other options from being locked into Canada Trust Mutual Funds. Unfortunately, once I was in, I never really got OUT of the CT/TD Mutual Fund  World. If I were doing this now, I would have set it up as a Trading Account of some kind where I could buy low MER Index Funds or ETFs, but hindsight is 20/20 when you are a blogger.

• The first time I brought up the topic of RESPs was in Kids and University: Better Use an RESP . You can see by the post I was only learning about the whole thing at the time.
• As a precursor to talking about RESPs I found an interesting article from the U of Waterloo talking about typical schooling costs. I summed those expenses up in University is going to cost HOW MUCH?!?
• I did some preliminary calculations figuring If I put $1000 a year away for my kids . It was heartening to see.
• RESP Some Final Thoughts was me summing up what had been discussed during the week. How to use an RESP as a savings vehicle to save for your kids’ education.
• Here is a good question, do you want to set up an RESP for your child? What is your view on Student Debt, and kids graduating with huge debt loads? There are follow-on stories as well Student Debt 2 , and Student Debt Epilogue. Wonder what can happen with Student Debt? How about when a Student Line of Credit is set up, or is it?
• Another critical point to consider is what type of degree your child might get? CO-OP Degrees a Parent Financial Savior points out that if a Child is in a successful CO-OP program they may graduate with money in their pocket. You might have some in yours too.
• Remember when you set up the Savings Program that high MER Mutual funds are not what you should be using. The MER is the Worm in the Savings Plan, it eats out the core of things.
• RESP: Free Money Folks is an overview I wrote early on. Talking about all the grants and bonds available in the RESP.

Tuition and School Costs

I did tend to harp on the price of schooling. I did this in September and December when I got the girls’ schooling bills. When I started paying more in September than I made (gross) my first year working, I started getting a little worked up.

• RESP: You Realize it is only going to cover tuition, right? I attempt to warn parents of future University students that your RESP is really not enough to cover it all. There are a plethora of expenses to pay.
• I started getting an understanding of how much this was going to cost after my Alumni Visit to my school. After that I wrote University Education in Canada.
• Whatever we do in life there are always tax implications. With Students and Taxes I delve deeper into the subject, of RESP tax implications.
• Money Hemorrhage in August? (aka the Scream) This chronicles how August became yet another month I hated in the year, due to the huge money outlays every year.
• Stats Canada publishes every year a discussion about Tuition Costs. Interesting how they don’t have any semblance to the inflation rate. Here are a few that I commented on:
  • Tuition Costs Up? Really, I didn’t notice!
  • Tuition and Inflation are in No Way Related
  • Tuition Fee Study
• Another interesting study about how Canadian Students Pay Net Zero for Tuition, which is hokum.
• If your child is not living at home you need to think about The Cost of University Residence. At least look at the cost of where your child will live at school.
• My own retrospective on this topic with University Cost How Much ? There were some things I hadn’t thought about.
• If you need more proof here is an Example of What $350 Looks like, at University.
• University Costs : The Cost of University in Canada you may think that we are not as bad as our friends down south, but the cost of University in Canada is not cheap.
• Look at your tuition statement and look at the MANY fees added on by the University. It is important to know how many do you HAVE to pay, and how many are optional? The Business of University Fees is a nasty one.

Extraction of RESP Funds

After diligently putting money into your RESP accounts, you might think extracting it might be a straightforward process. Unfortunately it is not as easy as you would hope. The first year of taking money out was simple. Then the Government started asking for PROOF that your child was in school before allowing folks to take money out of the RESP accounts.

• Every year you go through the same things so setting up the Tuition Circle every August might be worthwhile for you too, just to make sure both student and parent know their “duties” for the coming school year.
• RESP: Back to School Reminders useful to set up a checklist of what you need each August to extract funds from your RESP, is more of the same (i.e. it’s better to talk about this before your kids go off to school).
• Canada Learning Bond and RESPs, where I think I have figured out more money, that I have never actually ever received thanks to TD not doing what I think they should.
• RESP and more tree died (which they did this year too), which is last year’s installment on the entire RESP saga. Why can’t this process be done on-line? Someone must get a bonus for the foot length of paper used in this program.
• Registered Education Savings Plan the Saga continues explains what happens when the system changes from the previous year and the headaches it creates.
• RESP Wrinkles where I first learned taking out money from an RESP wasn’t going to be as easy as the previous year. Yes, it would be best if you proved your kid has gone off to school.
• RESP Money to get Money where I found out how much it cost to prove I just spent $2500 . Some schools send you a letter for free, while others figure they should also get paid.
• RESP: The Old Switcheroo where I rant about one university’s trick for getting more money out of me, it does get repetitive I must admit.
• RESPs and Rules taking your own money out shouldn’t be this hard, should it? It can be as complicated as your bank wants to make it. Most of the rules are to get you in the front door to sit down with them.
• RESP: This Round Finally Ends (Prologue) I try to start taking money out of the RESP
• RESPs Another Year and More Fun is yet another fun year of taking money out from an RESP, when I thought it might be simple (silly me)
• I wanted to show a simple example of someone putting the Max money in every year until their child turned 18. Thus I wrote RESP : From Start to Spend.
• Just when I thought I had it all figured out, they change the rules, well, sort of my own fault for switching to E-Series account, but the TD RESP E-series Bear Trap caught me.
• A professional wrote a Guest Post about this topic as well RESP withdrawals and Taxes misses some info on Quebec and doesn’t point out you should front load taking out taxable funds for your kids.
• Another guest writer discussed the same topic with A Guide to Understanding the Tax Considerations When Cashing out an RESP . He missed a few crucial points too.

However, with all of this commentary on RESPs, I can say that my four best investments were my kids’ RESP. I got paid back with three kids who got a good start on their Adult lives without a large debt.

Other RESP Related

I branched out to talk about other RESP programs too:

• What is the Canada Learning Bond? Can I get that if I am low income, Smartsaver.org RESP: Helping Lower Income Families , will help with that.
• I summed a lot of this up with Some Really Useful RESP Tips, which are more notes from my interviews that I have down about RESPs (yet never been paid for any of them).
• Is the RESP really only being used by the Rich? Stats Canada has put out a report that seems to suggest that this is the case.

Somewhat Education Related

Given my family is a constant subject in my writings, here are a few extra ones that I wrote over time

• Parenting Tip #327: Large Expenditures (Weddings & Education) was more of a warning shot to my own kids about what the deal was when they swanned off to University, sometimes you need to set the rules up early.
• An important part of a child’s education is their computer so I wrote Student Computer Safety Tip , given I have spent a great deal of time as I.T. to my children (remotely).
• I gave my kids the same great advice my Dad did, when I went off to school and you can read it too Advice to Future University Students.
• It is interesting what you think about when you watch your daughter graduate, mine was So that is what $50,00 looks like.
• If you think you have bid farewell to your children when they go away to school or graduate, think again. It would help if you learned about your Lifestyles with Boomerang Children.

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