Did you know an RESP (Registered Education Savings Plan) is one of the best investments you can make? Did you also know that opening an RESP for your child, grandchild, niece or nephew also makes you eligible to receive additional FREE MONEY towards your investment from the government? Learn about one of the best kept investment secrets out there during our live 45-minute webinar. Featuring: Jim Wanamaker, Financial Planner – Educators Financial Group Moderated by: Bruce Sellery, financial journalist and former BNN anchor

1. P L A N N I N G · I N V E S T I N G · L E N D I N G www.educatorsfinancialgroup.ca
WHY RESPs DESERVE A LOT OF
R-E-S-P-E-C-T
Presented by: Jim Wanamaker | Moderated by: Bruce Sellery

2. Why RESPs Deserve a lot of R-E-S-P-E-C-T
Meet your moderator
Founder of Moolala (a personal finance training company)
Bruce Sellery

3. Why RESPs Deserve a lot of R-E-S-P-E-C-T
Meet your subject matter expert
Jim Wanamaker
Financial Planner – CFP, B. Comm, BA
Educators Financial Group

4. Why RESPs Deserve a lot of R-E-S-P-E-C-T
About the webinar
Will I be able to get
a copy of the slides
after the webinar?
Is this webinar being
taped so it can be
viewed afterwards?

5. Why RESPs Deserve a lot of R-E-S-P-E-C-T
Tonight’s R-E-S-P agenda
• Cost of education
• RESP basics
• CESG: additional 20% return!
• Other savings options
• What happens if they decide not to
pursue post-secondary education
• Wrap up

6. Why RESPs Deserve a lot of R-E-S-P-E-C-T
Cost of education
Source: HRSDC Statistics Canada

7. Why RESPs Deserve a lot of R-E-S-P-E-C-T
RESP basics
So, what exactly is an RESP?
• Savings account for post-secondary education
• Basket to hold investments
• Tax shelter
• Attracts CESG
(Canada Education Savings Grant)

8. Why RESPs Deserve a lot of R-E-S-P-E-C-T
Only parents can contribute: this is FALSE
Misconception

9. Why RESPs Deserve a lot of R-E-S-P-E-C-T
Subscriber vs. contributor
Subscriber Contributor
Canadian resident and SIN Canadian resident and SIN
RESP account holder
No requirement to be an
account holder
Controls RESP No control over RESP

10. Why RESPs Deserve a lot of R-E-S-P-E-C-T
Here’s what you need to know:
• After-tax dollars
• Last day for contributions:
December 31st
• Contributions are returnable
to subscriber
RESP contributions

11. Why RESPs Deserve a lot of R-E-S-P-E-C-T
Beneficiary entitlements
What the RESP recipient is entitled to:
• Lifetime RESP contribution room: $50,000
• CESG lifetime: $7,200
• RESP money for education
expenses only

12. Why RESPs Deserve a lot of R-E-S-P-E-C-T
Family vs. individual RESP
Family RESP Individual RESP
Family relationship (blood or adoption) No family relationship required
Multiple beneficiaries One beneficiary
Replacement beneficiary allowed Replacement beneficiary allowed
Why RESPs Deserve a lot of R-E-S-P-E-C-T

13. Why RESPs Deserve a lot of R-E-S-P-E-C-T
Investing in an RESP

14. Why RESPs Deserve a lot of R-E-S-P-E-C-T
Q&A: time to hear from you

15. Why RESPs Deserve a lot of R-E-S-P-E-C-T
CESG: additional 20% return
Post 2006:
• Annual contribution x (20% CESG)
• Increase to annual CESG: $400 to $500
• Lifetime maximum per beneficiary: $7,200
• Eligibility ends after age 17

16. Why RESPs Deserve a lot of R-E-S-P-E-C-T
Unused CESG amount
What happens with unused CESG amount?
• Amount can be carried forward
• Carry forward one year at a time
• Post 2006 annual maximum
CESG: $1,000

17. Why RESPs Deserve a lot of R-E-S-P-E-C-T
CESG catch up
Situation:
Erika and Robert just opened an RESP for their
son KJ age 4 (born 2007). How do they catch up
on unused CESG amount?
KJ’s unused CESG amount at age 4 is $2,500:
+$500
(2007)
$500
(2008)
+ $500
(2009)
+ $500
(2010)
+ $500
(2011)
= $2,500

18. Why RESPs Deserve a lot of R-E-S-P-E-C-T
Weighing the options

19. Why RESPs Deserve a lot of R-E-S-P-E-C-T
It’s time to take more questions

20. Why RESPs Deserve a lot of R-E-S-P-E-C-T
Other savings vehicles
Tax-free savings
account (TFSA)
• Minimum age
requirement:18
• Tax shelter
In-trust for
account
• Investment belongs
to child at 18
• Multi purpose account

21. Why RESPs Deserve a lot of R-E-S-P-E-C-T
RESP tips scale

22. Why RESPs Deserve a lot of R-E-S-P-E-C-T
In search of contribution money?
Here are some tips:
• Use RRSP tax return and benefit from
- Income tax reduction/tax shelter
- CESG: increase savings by 20%
• Invest Universal Child
Care Benefit
- $100/month for 6 years
will save $7,200
- $7,200 will attract $1,440
of CESG

23. Why RESPs Deserve a lot of R-E-S-P-E-C-T
Time for more RESP Q&A

24. Why RESPs Deserve a lot of R-E-S-P-E-C-T
Education Assistance Program
What you need to know about EAP:
• Withdrawal for school expenses only
• EAP: CESG and investment return
• Limit: $5,000 for first 13
consecutive weeks

25. Why RESPs Deserve a lot of R-E-S-P-E-C-T
What if they don’t want to go?
Under 21:
A sibling by
blood or
adoption
CESG and
contribution
room
unaffected

26. Why RESPs Deserve a lot of R-E-S-P-E-C-T
What if they drop out?
Situation:
10 years ago, Barbara set up a family RESP for
her son and daughter. Roger is 21 and after 2
years of university drops out. Christine, age 18,
starts university next fall.
What the experts say:
• Transfer Roger’s RESP to his sister Christine
• Keep his RESP open in case he goes back to school

27. Why RESPs Deserve a lot of R-E-S-P-E-C-T
Here’s how you go about closing an RESP:
• CESG returned to government
• Capital returned to subscriber
• Investment income: cash or RRSP
No replacement beneficiary?

28. Why RESPs Deserve a lot of R-E-S-P-E-C-T
Accumulated Income Payment
Beneficiary:
21 and not
in school
and
Requirement
Cash-out
taxable
Put into RRSP
non taxable
Subscriber
RESP opened
9 years
Option

29. Why RESPs Deserve a lot of R-E-S-P-E-C-T
Last call for questions

30. Why RESPs Deserve a lot of R-E-S-P-E-C-T
In addition to this webinar, increase your
financial learning even further by:
• Signing up for eNews, our exclusive email list
• Call 1.800.263.9541 to book your free
one-on-one financial planning session
• Visiting www.educatorsfinancialgroup.ca and
signing up for The Learning Centre
Wrap-up: call on Educators

31. Why RESPs Deserve a lot of R-E-S-P-E-C-T
And that’s a wrap
The information provided is general in nature and is provided with the understanding that it may not be relied upon as, nor considered to be, the
rendering of tax, legal, accounting or professional advice. Attendees and readers should consult a financial planner and their own accountant
and/or legal advisor for specific advice related to their circumstances. Educators Financial Group will not be held responsible or liable for any
losses, costs, damages or expenses incurred by reason of reliance as a result of the aforementioned information. The information presented was
obtained from sources that are believed to be reliable. However, Educators Financial Group can not guarantee their completeness or accuracy.
Commissions, trailing commissions, management fees and expenses may all be associated with mutual funds. Please read the simplified
prospectus before investing. Mutual funds are not guaranteed, their value changes frequently and past performance may not be repeated.
Bruce Sellery Jim Wanamaker

32. Why RESPs Deserve a lot of R-E-S-P-E-C-T
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