Saving for your Kids' Education

[DoubleF]

Originally Posted by Torture

You can set it up yourself on Wealthsimple in about 2 minutes and they handle all of the grants. Dead simple.

Student loans may be interest free now, but the ability to not have to worry about money (as much) when pursuing your education and not starting your young adult life in a pile of debt is such a leg up if you have the means.

Well, what's done is done. My wife set it up originally. She wanted to go with the big bank we used for all our banking needs and I was fine with that. I was busy, so I thought that with the advisor, and a written set of instructions, it couldn't get messed up. How wrong I was.

[powderjunkie]

This is the first I'm hearing of a Family Plan option. We have an RESP with questrade for kiddo#1, but haven't opened one for our very recent arrival. How would I go about converting to a family plan?

[Torture]

Originally Posted by DoubleF

Well, what's done is done. My wife set it up originally. She wanted to go with the big bank we used for all our banking needs and I was fine with that. I was busy, so I thought that with the advisor, and a written set of instructions, it couldn't get messed up. How wrong I was.

Still doable!
https://help.wealthsimple.com/hc/en-...s/360056590474

[Buff]

Originally Posted by fundmark19

Liberals made all federal student loans interest free last month.

https://nationalpost.com/news/politi...-loan-interest

huh. I actually like something this government has implemented.

[Buff]

Originally Posted by DoubleF

Well, what's done is done. My wife set it up originally. She wanted to go with the big bank we used for all our banking needs and I was fine with that. I was busy, so I thought that with the advisor, and a written set of instructions, it couldn't get messed up. How wrong I was.

Originally Posted by Torture

Still doable!
https://help.wealthsimple.com/hc/en-...s/360056590474

We started saving with a questionable fund.... can't think of the name. Had a couple of people tell me it was just about a scam but we stuck with it. A few years later we went to a financial advisor and when we told him we were with that fund/plan he dropped his head and told us that we should seriously consider getting out of that plan. It wasn't actually a scam but it was very difficult to withdraw money like a normal RESP. He warned us that we won't get all our money back that we invested but we can get something out of it if we transfer it to a new RESP. I think we got a fair amount of what we invested out of it and setup a new RESP. The guy who signed us up for that plan was super upset at us and became quite unprofessional when we initiated the process to transfer to our current RESP.

My sister-in-law had the same plan and when her oldest went to school it was a pain in the butt to get money out of that fund and they lost a lot. I wish I can remember the name, but I believe it doesn't exist anymore, or there were enough complaints that they changed their restrictive rules, or something like that.

[Paulie Walnuts]

Stay away from group RESP for sure. Companies like Knowledge First is a no no.

[RichieRich]

Originally Posted by Buff

We started saving with a questionable fund.... can't think of the name. Had a couple of people tell me it was just about a scam but we stuck with it. A few years later we went to a financial advisor and when we told him we were with that fund/plan he dropped his head and told us that we should seriously consider getting out of that plan. It wasn't actually a scam but it was very difficult to withdraw money like a normal RESP. He warned us that we won't get all our money back that we invested but we can get something out of it if we transfer it to a new RESP. I think we got a fair amount of what we invested out of it and setup a new RESP. The guy who signed us up for that plan was super upset at us and became quite unprofessional when we initiated the process to transfer to our current RESP.

My sister-in-law had the same plan and when her oldest went to school it was a pain in the butt to get money out of that fund and they lost a lot. I wish I can remember the name, but I believe it doesn't exist anymore, or there were enough complaints that they changed their restrictive rules, or something like that.

Sorry to hear. Also sounds like y’all got bamboozled by an “advisor” Who was in it for the commissions. What’s done is done but this does emphasize you kinda need to know what you need and not let them tell you what you want.
The biggest thing is to START contributing as soon as possible. Also strongly suggest on any gifts from grandparents should include some $$$ instead of pure junk toys and clutter. So perhaps a cheesy birthday gift AND $50 (or whatever) for the RESP.
Remember too that it’s about time IN the market rather than TIMING the markets. Most kids have nearly a 20 year lead time so invest in decent funds (or whatever) but don’t be so conservative you’re barely getting normal inflation.

As for kids earning money themselves - gosh darn right they need to have some skin in the game too. Tell ‘‘em you’ll help with some costs but they still gotta contribute to help. And yes that includes taking loans out. If you and they are smart you’ll take the loans, use the money wisely, and pay it back within a few months after finishing.

And lastly couple items:
1. Schooling away from home is crazy expensive. So if they’re not little bastards then encourage them to stay home.
2. They need to pick a decent post secondary focus. Sure they might love knitting but a degree in knitting probably doesn’t pay the bills. So return on investment actually should be discussed. Such as… hey Kid, what kinda lifestyle you want? Hobbies? Travel? Well that’ll cost ya $50k education and 5 years and you’ll come out making $11k/yearly and won’t pay that loan off for 25years. Is it worth it? Oh no… ok then do better. Your problem kid.

[DoubleF]

Originally Posted by Buff

We started saving with a questionable fund.... can't think of the name. Had a couple of people tell me it was just about a scam but we stuck with it. A few years later we went to a financial advisor and when we told him we were with that fund/plan he dropped his head and told us that we should seriously consider getting out of that plan. It wasn't actually a scam but it was very difficult to withdraw money like a normal RESP. He warned us that we won't get all our money back that we invested but we can get something out of it if we transfer it to a new RESP. I think we got a fair amount of what we invested out of it and setup a new RESP. The guy who signed us up for that plan was super upset at us and became quite unprofessional when we initiated the process to transfer to our current RESP.

My sister-in-law had the same plan and when her oldest went to school it was a pain in the butt to get money out of that fund and they lost a lot. I wish I can remember the name, but I believe it doesn't exist anymore, or there were enough complaints that they changed their restrictive rules, or something like that.

Primerica?

I know there were a handful of MLM that do RESP and RRSP and they're sketchy AF.

[Sliver]

My buddy was on that plan when we were young (like, his parents set it up for him). He kept calling it his scholarship, which pissed me off to no end because this guy didn't qualify for a single scholarship anywhere ever.

[Slava]

Originally Posted by DoubleF

Primerica?

I know there were a handful of MLM that do RESP and RRSP and they're sketchy AF.

Originally Posted by Sliver

My buddy was on that plan when we were young (like, his parents set it up for him). He kept calling it his scholarship, which pissed me off to no end because this guy didn't qualify for a single scholarship anywhere ever.

It's probably the Canadian Scholarship plans. I think there is another called Heritage Savings and maybe one called Knowledge First? Regardless, it's the actual structure of the plans, and how they are setup.

Primerica is pure insurance (I think), and they don't really get into investing. They had a group of Primerica people who started World Financial Group, but I can't recall ever coming across an RESP there so I don't how they structure those.

[Paulie Walnuts]

Originally Posted by Slava

It's probably the Canadian Scholarship plans. I think there is another called Heritage Savings and maybe one called Knowledge First? Regardless, it's the actual structure of the plans, and how they are setup.

Primerica is pure insurance (I think), and they don't really get into investing. They had a group of Primerica people who started World Financial Group, but I can't recall ever coming across an RESP there so I don't how they structure those.

Heritage Savings and Knowledge First are the two I know of, and you absolutely do not want to get those. You are better off just sticking with the bank.

Primerica and World Financial Group are also pyramid schemes. I kept getting messaged by a personal trainer at Gold Gym to work a side hustle at World Financial Group.

[kevman]

Originally Posted by fundmark19

Student loans are interest free. Kids can fend for themselves

Is anyone else betting on free post secondary by our federal government by the time their kids are university age?

[Monahammer]

Originally Posted by kevman

Is anyone else betting on free post secondary by our federal government by the time their kids are university age?

Why not both? Save in an RESP and hope that university becomes a universal benefit by then, then roll over what's been saved into your retirement fund instead.

[DoubleF]

Originally Posted by Slava

It's probably the Canadian Scholarship plans. I think there is another called Heritage Savings and maybe one called Knowledge First? Regardless, it's the actual structure of the plans, and how they are setup.

Primerica is pure insurance (I think), and they don't really get into investing. They had a group of Primerica people who started World Financial Group, but I can't recall ever coming across an RESP there so I don't how they structure those.

Primerica definitely has RRSP and RESP. I've seen a few instances where they initially refuse to pay out, then conceded to give you back your principal less fees but not the gains and earnings (Oh boy how generous!). Usually it took months and lawyers to get them to relinquish the money.

[T-Dog]

We dutifully contributed to a family RESP and prudently managed the investments. Now fully funded and two of the three kids aren’t interested in studying so there’s too much money in it. Somewhat tongue in cheek, I know they have a long time to use the funds, but those damn kids better recognize their life opportunities and get an education!

[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.

[Lubicon]

Originally Posted by fundmark19

Liberals made all federal student loans interest free last month.

https://nationalpost.com/news/politi...-loan-interest

Has this actually been done yet, or just promised. I like the idea, I'm just not sure it ahs been done yet.

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.

Having just put my two kids through school you can ballpark about $8k per year for tuition and direct school expenses, and at least the same again for housing/food (probably more) if they move away from home. So call it $16-20k per year.

[photon]

I figure just save whatever you feel you can handle and the kids will (SHOULD!) be thankful for the help when the time comes. If it covers what they like then great.. if they choose something that takes $200k then we can all figure out how to cover it at that point.


But some averages: https://www.universitystudy.ca/plan-...udy-in-canada/
https://www150.statcan.gc.ca/n1/dail...10908a-eng.htm

[RichieRich]

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.

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.

[Paulie Walnuts]

To get the max grant it's 2500 a year and I wouldn't do more. If you are not utilizing a TFSA you can put extra in there since it's tax free.

Also if you can't contribute one year you can do the previous if something changes to get your grants.

If the loans are interest fee you can have your kids take out loans and let the money grow a bit more.

Keep in mind the first withdrawal is a max of 5000 for PSE or EAP I forgot which one.