Quote:
Originally Posted by puckedoff
How much is too much (per child) in an RESP? My kids are young so it is hard to know how much they will need in the future, but I don't really have a clue what a university degree costs in current day even (inclusive of living expenses etc).
Do you guys set a target amount and then tap out after that? Even maxing out the government match on the RESP seems like way too much to me.
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Check my rant above as well.
Basically save enough each year into the RESP to maximize the governments $500 contribution, which puts you at about $3k/yr. Your last contribution is the year the kid turns 17. Assuming average returns at 6% yearly for only 16yrs that's approx $80k. That's more than enough for staying local/at home, and taking 5 years for a degree. Keeping in mind it'll keep compounding after those years while you pull $$$ out.
https://smartasset.com/investing/inv...tor#bk6SjerkGJ
Just the governments yearly contribution of $500 over 17yrs at 7% is yearly $16k, which covers nearly 2 years of most degrees basic costs.
Financially we did not contribute all available years but I am comfortable with total amount, also knowing that if necessary either they can get a loan, get a job, or we can help. At this point our yearly gains have covered yearly tuition.
My plan is not to deplete the RESP until schooling is done and then it'll all come back to my portfolio.