Coordinate RESP contributions with your adult children to take advantage of government grants and tax-deferred growth. Consider giving money to your children to contribute directly if you want to avoid taxes if your grandchild doesn't pursue post-secondary education. Complement RESP savings by contributing to your own TFSA to benefit from tax-free growth while waiting for the money to go into the RESP. Top up education savings in your grandchildren's own TFSAs when they turn 18 for flexible funds that can be used for any purpose.
1. Leave an educational legacy
for your grandchildren.
How to save for
your grandchildren's
education
2. Introduction
The bond between grandparents and
grandchildren is special. You get to share your
wisdom and stories with eager listeners and
occasionally, you get to treat them to ice
cream before dinner.
If you’re able, you may want to plan to leave a
legacy for your grandchildren. One of the best
ways to set them up for a successful future is
to contribute to their education savings.
3. Coordinate RESP contributions
with your adult children
Registered Education Savings Plans (RESPs) are specifically designed to help
parents and grandparents save for a child’s education. They offer opportunities for:
Government matching - Canada Education Savings Grants (CESGs) match 20%
of your contributions up to a maximum grant of $500 each year.
Tax-deferred investment growth - no tax is due until your grandchild starts
withdrawing money to pay for post-secondary education.
4. A child can be named as a beneficiary on more than one RESP. However,
there is a lifetime contribution limit of $50,000 per child and this can get
complicated to track across multiple plans.
Find out if your children have opened an RESP for your grandchildren, and
then coordinate your contributions with theirs.
5. Consider giving
your adult children
the money to
contribute
Rather than contributing directly to
the RESP, you may want to give your
children money so that they can
contribute more to their child’s RESP.
This can protect you from taxes if
your grandchild decides not to
pursue post-secondary education.
6. Complement RESP
savings with your TFSA
Contribute $30,000 to your Tax-Free Savings Account
(TFSA), if you have the contribution room available.
Move $2,500 into the RESP every year.
Let’s say you plan to contribute a specific amount to a
grandchild’s education savings—for example, $30,000—
and you have the money available now. You should:
That way, you’ll benefit from a TFSA’s tax-free investment
growth while the money is waiting to go into the RESP. This
can make a significant difference to the amount your
grandchild has available to pay for his or her education.
7. Top up education
savings in your
grandchildren’s
TFSA
When your grandchildren are 18, they can open
their own TFSAs. If their education savings need
a top-up, this can be an excellent place to do it.
Beyond offering tax-free investment growth,
TFSA withdrawals can be used for any purpose
—unlike RESP savings, which must be used to
help pay for education-related expenses. That
makes them a flexible source of extra money
while your grandchildren are studying.
What if your grandchildren don’t need their
TFSA money for school? You’ll be helping them
start a lifelong habit of saving and investing—
and that’s a legacy in itself.
8. Let us
help you
Get in touch with our Trust Life
experts who can help you save for
your grandchildren's education with
a custom-made plan made for you
and only you.
No fees, no obligation. Talk to us
today!
