What are you doing to save for kids education - RESP, anything else?

[temple5]

I figured I would ask this here.

I just had a baby boy at the beginning of June and we just had an interesting meeting from a lady from http://www.cst.org/ . We think they got our info from Time Maternity store in Chinook (those ba$stards)

Basically wanting to sign us up for RESP through them.

I figured it should be something I research as everything with it sounded fine except the fee structure (basically first 5 years of accumulated interst is paid as fee which you get back at the end as a lump sum (without the accrued interest of the money))

The restrictions on the fund didnt seem crazy.

I just figured Id as what others are doing. I was thinking it wsant so bad to put in $109/month and then look at other options for more flexibility.

I saw the thready from 2010 but figured there might be updated info for 2014

[Sliver]

I put in $208 per kid per month. That's the minimum amount (as I understand it) to receive the maximum government contribution.

[JiriHrdina]

We take the $100 UCCB and put it directly into the RESP each month plus a little on top of that.
We have our RESP through one of our financial advisers who looks after a portion of our retirement savings. No reason to bring someone in new to handle this if you have someone you work with and already trust. There are some folks on CP that can also help you.

You should also make sure you tap into all government programs that are available.

[darklord700]

Same here. Put in $200 a month for each kid to get the maximum government grant.

[Slava]

Originally Posted by temple5

I figured I would ask this here.

I just had a baby boy at the beginning of June and we just had an interesting meeting from a lady from http://www.cst.org/ . We think they got our info from Time Maternity store in Chinook (those ba$stards)

Basically wanting to sign us up for RESP through them.

I figured it should be something I research as everything with it sounded fine except the fee structure (basically first 5 years of accumulated interst is paid as fee which you get back at the end as a lump sum (without the accrued interest of the money))

The restrictions on the fund didnt seem crazy.

I just figured Id as what others are doing. I was thinking it wsant so bad to put in $109/month and then look at other options for more flexibility.

I saw the thready from 2010 but figured there might be updated info for 2014

In all honesty, (and yes, I'm biased on this topic), I wouldn't go through them. You can set-up an RESP and invest the funds there and do better than what they are offering, with flexibility. The CST plan offers basically no flexibility and once you're in, its hard to get out. I could elaborate on why, but it should be somewhat logical that having flexibility to stop or start payments or change the investments is something that you will want.

[pseudoreality]

Just set one up for my baby girl through CIBC managed portfolios. Put in $2500 a year (208.33/month) and the government matches 20%. If your kid doesn't use it the government gets their money back and a school you identify when you set it up gets the interest on the government portion. Whoever takes the money out (you or your kid) will be taxed on the interest, but students typically pay little to no tax.

[bubbsy]

set up our little guy on an resp basically 2 months after he was born. Put in i think 200-300 a month.

Question really is how much is university going to cost 18 years from now....

[Regulator75]

Originally Posted by Sliver

I put in $208 per kid per month. That's the minimum amount (as I understand it) to receive the maximum government contribution.

Same here.

We went through http://www.heritageresp.com/

[Table 5]

I make sure that she is extra cute around her grandparents.

[Buff]

Originally Posted by Regulator75

Same here.

We went through http://www.heritageresp.com/

That lost me a lot of money. Started with Heritage, found out about come cousins not getting money because they didn't pay full tuition because of going to same school for which their dad was a professor. Did some research and found a lot of people having problems with Heritage. Went to our financialadvisor and asked him about Heritage and he told us to go with anybody but Heritage. We tried to get out to minimize our losses, and we lost a lot of money by pulling out but are happy knowing that our new RESP has a better "guarantee" (nothing is guaranteed) than what Heritage was selling us. Just do some google searching to learn about it.

[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.

[GreenLantern]

Originally Posted by bubbsy

set up our little guy on an resp basically 2 months after he was born. Put in i think 200-300 a month.

Question really is how much is university going to cost 18 years from now....

I've always looked at it as if the kid can live at home during their study then that is the difference between having a student loan and not having a student loan..

Of course that statement changes the higher up the academic ladder they climb, no amount of saving will put your kid through a specialty program, that comes out of your retirement :P

[Sliver]

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.

You're making 20% on your RRSPs?

[V]

Well, I make about 30% on tax money coming back, so yeah.

[redforever]

We have a private company set up with our kids as shareholders.

When they were university bound, we issued them dividends to cover their needs while attending university. They had jobs when university was not in session.

[prarieboy]

$215 per month per child at RBC. We decide where the money is invested so we can be as aggressive or cautious as we like. Like Slava mentioned flexability in investing for the long term is HUGE.

[BigNumbers]

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.

I am in the middle. I throw a few $K per kid into the RESP each year, but university in Canada is so cheap that I am not too worried about it. Plus with three kids, I am saving essentially with the view that 2/3 will need the full tuition. If all 3 need it, then I will have to buck up a bit, but for $5-6K a year in tuition and books (current, obviously) that's not very much in the grand scheme of what kids cost, yet people fixate on it like it's a $100K bill you need to prepare for.

I understand the 20% return, but you folks are not accounting for the downside risk to that free 20%: If a kid doesn't go, you lose it! And there is a huge tax disadvantage to RESPS versus using a TFSA, etc for example. It's NOT a tax deducible investment for you AND it's taxable when it comes out to the kid. Some people mistakenly say "so what? My kid won't pay taxes" but he'll have to use some of the tuition tax credits they get to offset the income, and they could have transferred those to you or saved them up.

Basically - the RESP is a good forced savings mechanism, but it's not the silver bullet many think it is. There is significant tax disadvantages and lost opportunity if the kid doesn't use it (I know there are lots of ways to access it, vocational schools, etc)

Coles notes: I use the RESP but do not maximize it, but supplement it with other investment strategies as the benefit of the RESP is really only the free gov't money, but if the kid doesn't go, you lose all that and have a double taxation issue.

[CaptainCrunch]

teach your kid how to throw a spiral and get him into the gym as soon as possible.

[Slava]

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.

Why don't you invest the RESP the same way as the other investments?

[V]

Because I was young and stupid when I had my first kid. Saw a commercial from CST, called them and set it up. Seemed like a good idea at the time. The effort and money lost in cancelling just isn't worth it.

The kid's about 8 years from university, so there's no point now.