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RESP Jan 2011 by ACCA
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RESP Jan 2011 by ACCA

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Canada Registered Education Savings Plan, OSAP, Child benefit, Investors education.

Canada Registered Education Savings Plan, OSAP, Child benefit, Investors education.
Non-Commercial source.
Made and updated by CEDI & ACCA,
www.ccesop.org

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  • RESP PTESENTATION V2 ENGLISH OCT 6,2008
  • RESP PTESENTATION V2 ENGLISH OCT 6,2008
  • 第一年,存 500 ,政府给 800 , 以后每年存 500 , 政府给 300 , 14 年后,总投入 7000 ,总资产超 20000

Transcript

  • 1. CANADIAN EDUCATION SAVINGS OUTREACH PROGRAM (CCESOP): By CEDI in Montreal Centre d'éducation et de dévéloppement interculturel Intercultural Development and Education Center   By ACCA in Toronto
  • 2.
    • Sponsor: Human Resources and Social Development of Canada
    • Mandate: Help you Save Early, Save More for your Children’s Post-Secondary Education
    • Website: www.canlearn.ca
  • 3. Child Benefit in Canada/Ontario
    • CCTB
    • UCCB
    • OCB
  • 4. Income Tax & Family Benefits Taxable Income 0- 10,320 10,320- 36 , 848 36 ,020 - 40,726 40,726 - 64,882 Tax Rate 0 21 .05 % 24.15% 31.15% 64,882- 74,698 74,698- 76,440 76,440- 81,452 81452- 126,264 OVER 126,264 32.98% 35.39% 39.41% 43.41% 46.41%
  • 5. Canada Child Tax Benefit - CCTB
    • CCTB : Basic & NCBS (National Child Benefit Supplement)
    • Family Net Income below $23,855 , Full amount NCBS & CCTB 。
    • Basic NCBS Per Year Per Month
    • 1st Child $1255 $1945 $3,200 $266.67
    • 2nd Child $1255 $1720 $2975 $247.92
    • 3rd Child $1343 $1637 $2980 $248.33
    • Family Net Income above $ 40,726, No NCBS within 3 children
    • Family Net Income above $110,000 , No CCTB within 2 children
  • 6. Universal Child Care Benefit - UCCB
    • Universal Child Care Benefit : $100 per month per child under the age of 6 , regardless of family income
    • Automatic Payment
    • Make up for 11 months missed (delayed application)
    • Taxable :Taxed under lower income parent
  • 7. Ontario Child Benefit - OCB
    • Ontario Child Benefit : All children under 18; Family Income
    • Automatic payment
    • July 20, 2007 ; $250/y(2007) , $600/y (2008), $1100/y (2009), $1300/y (2010) 。 Monthly since July 2008
    • $92 per month for 1st child
    • Family Income above $20,000, decrease at 8%
  • 8. “ Registered” Accounts in Canada
    • RRSP (Registered Retirement Savings Plan)
    • TFSA (Tax Free Savings Account):
    • RESP : (????)
  • 9. R EGISTERED E DUCATION S AVINGS P LAN
    • Is it too good to be true?
    RESP
  • 10. So I need a Plan…
    • If my child was born 2010, his Post-secondary education will cost $85,734*. That could rise to $136,186 * if my child lives away from home.
  • 11. Where can I get MONEY?
    • For Sure the Canadian government is always there to help, but:
    • They also encourage families to help themselves first and foremost, and
  • 12. Why should I bother RESP?
    • We are struggling for survival, No E xtra Money to put aside.
    • I’ve been called up by quite a few RESP agents and get annoyed.
    • Can I buy stocks in my RESP?
    • My friend told me RESP will affect my children’s OSAP application.
  • 13. Why should I bother RESP after all?
    • Tax Free growth.
    • Quite likely: Tax Free withdrawal.
    • Government will even give FREE MONEY!
    • (For Low income family)
    • Government will add money on top of my Money.
  • 14. Why should I bother RESP after all?
  • 15. Why should I start early? Based on a monthly $100 contribution, earning 6% tax-free compounded interest
  • 16. Free Money! Canada Learning Bond (CLB)
    • Can I get it?
      • My Child must be born on or after January 1 st , 2004
      • I must receive the National Child Benefit Supplement ( NCBS ) as part of CCTB
    • How to Apply?
      • My RESP provider applies on my behalf (Reminder on Provider)
  • 17. Canada Learning Bond (CLB)
    • How much can I get?
    • $500 when RESP opened
    • Afterwards, $100 per year, until child reaches $15
    • lifetime total of $2,000
  • 18. WH O CAN OPEN AN RESP ACCOUNT?
    • Case 1: Canadian Citizen
      • Birth Certificate
      • Certificate of Canadian Citizenship
    • Case 2: Permanent Resident
      • Permanent Resident Card
    • Case 3: Temporary Residents
      • Work Permit
      • Study Permit
  • 19. SOCIAL INSURANCE NUMBER (SIN)
    • SINs for the subscriber and beneficiary
    • Note: SINs that begin with a “9” are not eligible to open an RESP account
    • Service Canada
  • 20. As long as I save, no matter how little..
  • 21. Canada Education Savings Grant (CESG)
    • Can I get CESG?
      • RESP opened for my child.
      • Up to 17 years old.
      • SIN for Me and My child.
    • How can I apply?
      • RESP providers apply on my behalf
  • 22. Canada Education Savings Grant (CESG)
    • Basic CESG
      • 20% within $2,500
      • Every Family
    • Additional CESG (Reminder on Provider)
      • First $500
      • Low and Mid-income families
    • I must Put in money to get this grant
  • 23. A dditional CESG For F irst $500 annual contribution Family Net Income Level Basic Additional Total $ 41,544 or less 20% 20% 40% $ 40,970-- $83,088 20% 10% 30% $ 83,088 or more 20% NA 20%
  • 24. Numbers I Need to Know Annual contribution for grant: $2,500 Carry-forward policy allow Make Up for missed years Total Grant: Up to $7,200 lifetime per child Total Contribution: Up to $50,000 lifetime per child Maximum Grant Available Per Year (carry forward) Contribution Required Percent of Capital $1,000 $5,000 20%
  • 25.
    • Future of my Money:
    Future of My Money
  • 26. If I can afford $500 per year ( Family Income under $40,000) : I save $500 each year : Government will Give me: First Year: $ 700 Afterwards : $300 Per Year
  • 27. After 14 Years
  • 28. If I can afford $2500 per year I save $2500/y Get Basic CESG : $500/y Lifetime CESG: $7200
  • 29. After 14 years http://www.moneychimp.com/calculator/compound_interest_calculator.htm
  • 30. Using my RESP..
  • 31. Using my RESP
    • Get back my contribution: One time, Tax Free
    • Get Educational Assistance Payments for my Child (EAP)
      • EAP= Government Grants + Earnings
      • My child must be a Canadian resident to use EAP
      • My child must attend post-secondary school to use Government Grants
    • EAP Taxed at hand of My Child
  • 32. If my child doesn’t attend University
    • I can:
      • Wait, RESP account can stay open for up to 36 years
      • Transfer Earnings and Grants to a sibling
      • Transfer the earnings Tax-Free to my Registered Retirement Savings Plan ( RRSP )
      • I can withdraw the taxable earnings and pay tax (20%+ regular tax rate)
  • 33. Which RESP works for Me?
  • 34. Before Invest, Investigate
  • 35. WHERE CAN I OPEN AN RESP?
  • 36. Major Group Plans
  • 37. Compare Plans I can make regular deposit I love investment; I can’t make regular deposit Good for Me if Restriction on contribution and withdrawal. Cancellation Penalty;Protection of capital and 6% return rate on average. Flexible Risk of capital loss Pros &Cons Entrance Fee and Annual Management Fee Management Fee, Transaction Fee , Commission Fee Low-Risk Mutual Funds and Bonds Saving Account , GICs , Stock , Mutual Funds What Group Plan Dealers, Banks , Mutual Funds Companies , Insurance Companies , Financial Advisors Where Group Self-Directed
  • 38. Before I Decide:
    • Question for myself:
    • My family finance (stable income, low/high income)
    • Age of my children (Investment risk should go down as age of your children go up)
    • Educational and Career goal (College
    • University, Doctor, Lawyer)
    • My residential status
    • My investment preference
  • 39. Before I decide:
    • Question for my advisor:
    • Enrollment fee and management fee
    • Deposit schedule and amount
    • Investment options
    • Return Rate
    • Cancellation penalty
    • Withdrawal rules
  • 40. The RESP vs OSAP Debate
  • 41. How Much from OSAP?
    • Based on Financial Needs
    • How much?
      • Financial Need = Allowable Education Costs + Living Costs – Expected Financial Contribution
    • Expected Financial Contribution
      • Employment Income
      • Investment Income
      • Scholarship, grants, bursaries
      • Income of parents or spouse
      • Student’s RESP savings
  • 42.
  • 43. Sample case based on online estimator
    • Program: UT Engineer 2010 Sep-2011 April
    • Tuition: $10,095
    • Total Cost: $21,729
    • Parents Gross Yearly Income:$40,000
    4,525 4,973 Free Money 7,300 7,300 Debt 11,825 12,273 OSAP Funding 10,000 0/1000 RESP Income
  • 44. Sample case based on online estimator
    • Program: UT Humanity 2010 Sep-2011 April
    • Tuition: 5,216
    • Total Cost: 16,641
    • Parents Gross Yearly Income: 40,000
    4,054 5,348 Free Money 7,300 7,300 Debt 11,354 12,648 OSAP Funding 5,000 0/1000 RESP Income
  • 45.  
  • 46. Our Website: www.ccesop.org
      • Official website: www.canlearn.ca
      • Please fill out the evaluation form, Thanks!