Saving for Education
September 23, 2014
Just a few short weeks ago we sent our children back to school with notebooks, pencils and a brand new backpack. The summer seemed to fly by, and in hindsight, so does time in general. Many parents often exclaim they can’t believe their child will be starting another school year, and before you know it, they’ll be sending their kids off to college or university.
A recent survey found that 51% of students will have to borrow for post-secondary education and the average student owes the government $28,000 in student loans. By opening a Registered Education Savings Plan (RESP) and contributing early, you can help relieve some of the financial burden off your children in the future. It’s estimated that a four-year degree could cost upwards of $60,000, but for a child born this year we could see an increase to $140,000 by the time they’re ready for post-secondary.
Only one in three post-secondary students have an RESP and three out of four of those RESP recipients say they wouldn’t be able to afford school without it! Here’s what you need to know about RESPs – opening, saving and spending:
- You can open an RESP for anyone (including yourself or your spouse), or choose a Family RESP for several beneficiaries related to you by blood or adoption.
- Earn an immediate 20% bonus on contributions of up to $2,500 per year with the Canada Education Savings Grant (CESG). Additional CESG may be available based on family income.
- Accumulated earnings and government grants are taxed at the child’s lower personal rate when withdrawn.
- Contribute a maximum of $50,000 per beneficiary (excluding CESG portions). There is no annual contribution limit.
- You can change the beneficiary if your child doesn’t attend post-secondary school. If there’s no alternative beneficiary, simply withdraw the unused contributions and return the grant portion to the government.
- RESPs can be used to pay for tuition, books and living expenses.
Whether your child dreams of becoming a teacher, a mechanic or a pilot, help make their dreams come true by contributing to an RESP today. By contributing to an RESP at Libro, you’ll be automatically entered to win a $500 contribution.
Libro is here to help you maximize your RESP investment. We encourage you to meet with a Libro Coach or visit your local branch to determine a contribution and withdrawal strategy that works best for you and your family.
Libro Account Manager Receives Global Honour
Libro is excited to announce Robin Blythe, Account Manager at our Listowel branch, was awarded the Young Credit Union People scholarship at the recent World Council of Credit Unions annual conference, held in Gold Coast, Australia. Only five individuals receive this prestigious honour each year. The scholarship recognizes leaders under the age of 35, who have made a significant impact within their credit union, and who exhibit the greatest potential to contribute to the international credit union system.
A Great Time to Be Libro
Almost three quarters of the way through our first year as Libro Credit Union, we’ve reached another milestone in our journey. We’re very excited to unveil Be Libro, the foundation of our vision, and the fibre of who we are. Check out libro.ca/belibro to learn more.
Supporting Credit Unions
The Government of Canada has recently decided to tax credit unions the same as banks, ignoring the fact that credit unions put billions into local communities through loans, investments and community projects. The Credit Union Central of Canada has started a grassroots and social media campaign, My Credit Union Matters, intended to persuade the federal government and Minister of Finance of the critical role of credit unions. To share your credit union story, visit www.myCUmatters.ca. You can also send a letter to the federal Minister of Finance or post on social media using #myCUmatters.