Quote:
Originally Posted by V
We have an RESP setup for our first kid, but have regretted it for quite some time. Haven't set anything up for the other 3.
My investments do much better than the RESP has performed, and we don't really miss the extra 500 bucks the gov't throws in. Honestly, I don't even know if I'm going to pay for my kid's tuition. It's so cheap here, and it really hasn't risen that much in the 13 years I've been out of school. I don't see university being prohibitively expensive 15 years from now, regardless of what those salesmen would like to tell you.
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This is one of the most ridiculous things I have ever heard... Putting the money in an RESP is a GUARANTEED 20% immediate return, as the government matches. $500/year over 18 years is $9,000 before accumulated interest/dividends/capital gain (likey over $12,000 @ 4%)
Most financial instituitions have the option of starting a self directed RESP which would mean that you can invest in anything you could outside of the RESP, stocks, bonds, ETF's, Mutual Funds. etc.
To say something like "my investments do much better" is laughable, as you could just put those same investements inside of an RESP and defer any tax on your earnings for 18years (earning interest/dividends/capital gain on the defered tax)
As for your other comment about Tuition not changing.
since 2002. From 2006 to now the cost of tuition in Engineering at the UofA has risen at an annualized rate of about 6%. In 2006 Tuition and fees was $5673 and in 2014 $8742 Source: University of Alberta data book. Extending this out 18 years from now...about $25,000/year for tuition and fees.
It's your choice to invest inside of an RESP or not. but the reasons you state above make don't support your decision.