Education Planning

• RESP
• CESG

Financial Planning

Education Planning
In our ever-changing world, a post-secondary education is your child’s best defence against an uncertain future. While a post-secondary education is a valuable personal asset, it is expensive to acquire.

How expensive? Education costs will vary considerably depending on factors such as where your child will live, the university chosen, the degree sought and the program (i.e. medicine) selected.

A recent BMO Nesbitt Burns survey showed that the average cost of tuition, room and board for a full-time student is approximately $10,500 per year. Transportation and the cost of books increase the price even further. Since 1987, education costs have been rising by almost five per cent annually while the overall inflation rate has averaged only three per cent. If these trends continue, a newborn’s four-year university degree could easily exceed $75,000 assuming a three per cent inflation rate and over $100,000 if education costs continue to rise at five per cent annually – and you can double that amount if you’re considering a school in the U.S.

As the cost of a post-secondary education steadily increases, many parents are looking for ways to fund their children's future education needs. Fortunately, with a comprehensive education plan and an early start, a university education can be a reality for your children. Using our sophisticated planning software, your Investment Advisor can create a customized education analysis that will help you estimate the future costs of your child’s post-secondary education. Once the education funding goal has been quantified, your Investment Advisor will work with you to develop a plan to reach your education goals.

One of the best ways to save for education is through a Registered Education Savings Plan (RESP). An RESP is a tax-deferral savings plan that allows you to contribute up to a lifetime maximum of $50,000. The earnings accumulate tax-deferred while in the plan and the contributions are eligible for the Canada Education Savings Grant (CESG) of up to $500 per year for most beneficiaries.

As we enter the 21st century, it’s clear a post-secondary education will be required if your child wants to find a fulfilling and rewarding career. With the need to meet these future expenditures, it’s easy to see why saving for a child’s post-secondary schooling is a major financial objective for most parents.

At BMO Nesbitt Burns, our experience has shown that a dedicated savings strategy, that includes a Registered Education Savings Plan (RESP), has proven to offer the greatest assurance that the money will be there when it's needed.

For more information, contact an Investment Advisor at a BMO Nesbitt Burns branch near you.

If you would like a BMO Nesbitt Burns Investment Advisor to contact you, simply complete this brief contact form.

Note: The comments included in the publication are not intended to be a definitive analysis of tax law: The comments contained herein are general in nature and professional advice regarding an individual's particular tax position should be attained in respect of any person's specific circumstances.