RESP or RRSP?

You’re not the only parent to wonder if you should prioritize your retirement or child’s education savings. Which investment will really put your money to work: The Registered Retirement Savings Plan (RRSP) or the Registered Education Savings Plan (RESP)? And what if you didn’t have to sacrifice one for the other…

Strategies that pay off and cover all your bases

Can you plan for your child’s education and your retirement at once? Absolutely! We are pleased to share two strategies that will allow you to combine your savings goals for both these life projects and get the most of our investment.

Numbers that speak volumes

Survey Methodology: The CROP poll was conducted online from November 4 to 9, 2019, using a sample of 1,003 Quebecers.

For more statistics on the investment habits of Quebec parents, see our press release on this topic.1

Why is the RESP such a smart option?

Investing in an RESP rather than an RRSP or a TFSA has several advantages.

Up to $12,800 per child in grant money23

Every time you contribute to your RESP, the government chips in too. Yep, it’s true. Your child could receive thousands in extra funds for school! The grant money will match 30% to 60%2 of  the first $2,500 invested each year. Hard to think of another investment that rakes in that kind of return!  

Tax-efficient investing

The RESP is an appealing investment that grows tax-free. In a number of years, withdrawals from an RRSP will be taxed. Under an RESP, all the contributions you made will be refunded tax free. As for the amounts withdrawn as educational assistance payments (EAPs), these are taxable in your child’s hand, who will likely pay no or little tax given students have a lower income.

Guaranteed refund of your investment at the finish line

With an RRSP or TFSA, you often have to choose between performance and security, since few of these products guarantee your investment. With a group RESP from Kaleido, the refund of your savings is guaranteed at plan maturity,4 regardless of market conditions.

Kaleido also refunds an amount matching ALL the sales charges at plan maturity.4 This is an exclusive advantage we are proud to offer you!

 

An exclusive advantage: parenting support

Opening an RESP with Kaleido offers an additional advantage: family coaching! Kaleido is there to support parents every stage of their child’s journey towards post-secondary education.   

Offered exclusively to our clients,5 the Stepping Stone Program provides 6 hours of counselling annually (per family) from a professional team in the field of education. You’ll have the tools to face any obstacle that may arise: ADHD, bullying, sleep routine, breastfeeding support, learning difficulties, giftedness, eating disorders, etc.

Want to learn more?

Talk to one of our education savings professionals to learn more about our RESPs and all their options.

Invest in an RESP

Legal Notes

1. Methodology: The survey was conducted online by the CROP firm via a Web panel, from November 4 to 9, 2019, with a sample of 1,003 Quebecers.

2. Canada Education Savings Grant (CESG) from 20% to 40%. Based on the adjusted family net income. The annual CESG limit is set at $600 and the lifetime limit is set at $7,200 per beneficiary. Quebec Education Savings Incentive (QESI) from 10% to 20%. Based on the adjusted family net income. The annual QESI limit is set at $300 and the lifetime limit is set at $3,600 per beneficiary.

3. Canada Learning Bond (CLB) up to $2,000 per beneficiary for a child born after December 31, 2003, from a financially eligible family. Certain conditions apply. See our prospectus.

4. Investments made in T-Bills and Government Bonds. The refund of contributions at plan maturity includes an amount equal to the sales charges of $200 per unit under the REFLEX Plan. Under the INDIVIDUAL Plan, the sales charge of up to $200 is not refunded. Certain conditions apply. See our prospectus.

5. Certain conditions and restrictions apply.