What is an RESP?
With an RESP, you can save money to contribute to a child’s education. It is a way to invest in tax-sheltered growth.
The money will be taxed when drawn out by the beneficiary, but the amount will be low since your son or daughter will be in a low tax bracket while in school.
On top of the money you can contribute, there is access to a federal grant that will match 20% of your contributions every year to a maximum of $500. So, the earlier you start, the more you will benefit.
Cost of Education
Education is an expensive investment. In 2025, a four-year education will cost around $54,000 (Statistics Canada – The Daily). And, that is if the student is living at home. If your son or daughter does not live at home, the cost rises to around $90,000.
Putting money into an RESP now will help to offset those costs.
Graduating high school is no longer enough to get a job that will be sustainable and pay an adequate wage. It was once said that university graduates would earn, on average, $1 million more than those who merely completed high school. This is know as the “Million Dollar Promise“, which isn’t quite true, but university graduates will still earn more than a high school graduate.
So, while the cost of school may seem high, the long-term gain is even higher.
How to Start Now
For each child, you will need to have a Social Insurance Number and a copy of their birth certificate.
Contact an RESP provider who will help you choose the right RESP for your needs. Decide what you can contribute each month. Even if you feel you can’t put away as much as you would like, start somewhere. You can always increase the amount later.
Having the knowledge that money is secure in an RESP will help to put your mind at ease regarding the future of your child’s education.