This year your tax returns can benefit your grandchildren. The Globe and Mail has recently released an article outlining the benefits of placing this years tax returns into a Registered Education Savings Plan for your grandchildren. If you are debt free and receiving a tax refund, placing that refund in a tax sheltered RESP for your grandchildren could make a significant difference for them financially down the road when they are ready to attend school.
There is a high population of retired Canadians who have reached the limit they can place into their RRSP. These Canadians usually are debt free and have paid off their mortgage and because they are not bringing in an income they are usually eligible for a tax refund. Choosing to invest this tax return in a RESP will protect this money from future taxation and provide a substantial return later on for your grandchildren.
An RESP is a great investment option because of the Canada Education Savings Grant, which is money the federal government will add to the RESP, including 20 per cent on every dollar for the first $2, 5000 saved each year, up to $7,2000. This money can be used by the recipient any way they choose once they turn 17 and are enrolled in post secondary school. There are minimal restrictions on how the money has to be spent.
To insure you are receiving the high rate of return you deserve next year, contact us at firstname.lastname@example.org to set up a meeting with our team.
-Nicole Dronca, CGA