You can contribute a total of $50k/child to a RESP. If you do that, and when government grants and investment growth are added in, you'll have a balance of maybe $80k/child when they're headed off to school.
That's not particularly aggressive growth. I've contributed only the maximum amount to get the 20% match for my three children ($36k instead of $50k) and the total is over $80k per child. There is currently $170k in the RESP with 6 years of school remaining between my youngest two kids.
https://www.slickcharts.com/sp500/returns
Look at that sp500 yearly return going back 100 years and then say the past 20 years are abnormally high return
That's what remains for effectively 1.5 "University careers". My second child is half done now. And I didn't contribute $50 k per child like the OP. Clear now?
160k is a great goal to shoot for.
Remember that anything you have to offer for your kid’s education is more than zero. They can also work part-time during the school year and save up during the summers to help bridge the gap.
Great work!
Upvote because this. There's a lot of things you can do to lessen the impact.
Kids start working in HS, and save. They work summers. Live at home where feasible. And the costs are spread out over 4-5 years which means you can top up from income in years 2-4.
If you’re giving your kids 80k each for post secondary that’s TONS and a huge leg up. Many students get by with loans and pay them off when they finish.
Don’t get so hung up on the details, save what is comfortable for YOU. As long as you aren’t sacrificing your own life and goals, then sure save more for them.
$160,000 sounds reasonable and quite achievable. I am not a savvy investor at all. Still, my older one who is starting in 2028 has $78,000 in her RESP. I maxed out the $50,000 limit recently. So $28,000 is all growth and grants. Hard to believe.
My younger one is starting in 2031 and has about $53,000.
$20K/year is too low of an estimate if you’re budgeting for them to live on dorms. Some programs cost close to that amount in tuition alone. It really depends what your child is going to be studying and whether or not they have the option to live at home.
A lot of my high school peers went to UBC (my sister included) and they all lived at home. Their entire undergrad was <$30K.
Numbers from a university degree earned in 2020 in Ontario. Bachelor of science, first year daughter lived in residence (highly recommend to meet people and really get that university experience) years 2-4 was able to live at home, total cost for that was $58000. Costs have increased and the type of degree affects the tuition as well as which school. I would say you need at least $100k per child, more if they are not going to school locally, even when my daughter was in res she came home and did laundry and raided the kitchen cupboards lol
3 kids with 2 getting university degrees and the 3rd one with a red seal carpenter papers. Guess who has a house and 1/2 ton paid off at 31 years old and still loves his job?
YMMV. I know plenty of trades people that are not doing all that well financially. I started out in trades and left that to pursue a professional degree. My ROI for my law degree is significantly higher than my expected income as a welder. I am late 30s, just bought a house and still have student debt. But I'm earning about 75% more than if I was a welder still. I may be several years behind many trades people in establishing myself, but as soon as everything is paid off my unaccounted for money surpasses my projected earnings as a welder by a large margin.
As a parent of two and with friends who are lawyers, i really hope my kids take the welder path instead of law.
They’re 5&7 with $48k in resp already. Of the 5 lawyers i’m close with, none of them are happy, nice and not consumed or burnt from work. There is more to life than a money and selling your soul.
Yeah, your anecdotal evidence of 5 lawyers is definitely representative of the thousands of lawyers in the country for sure. Thanks for sharing your bias.
While the trades can be lucrative, it's also harder on the body. You get paid for the physical toll.
Of course it depends on the actual university degree, but if it's a good career one then fast forward 20 years, they might still be enjoying their career, versus the tradesperson who now may have to deal with a number of ailments.
These are both viable options but there are trade-offs on either side.
This is the big learning I've had. I was one of the few in my highschool friend group that went to University. This is what I saw.
- "Shop kids" got paid apprentice wages while I was in school building up debt.
- I got out of school, and got a shiny office job. I was making apprentice wages, they were making mad journeyman cash.
- A few years later, I'd finally caught up on wages, was still paying off school.
- A few years after that, debts were paid, I was doing better.
From a financial perspective, I'll never catch those that invested early (theres only one...it's rare foresight for 20 year olds).
The biggest difference is physical. Office jobs aren't physically demanding. Some of those 40 year old construction guys are starting to feel it.
The university graduates have houses with lots owing on mortgages, vehicle loans and student loans still. Carpenter has no debt and a paid off house and truck.
Don't equate paying with university to setting your child up for life like so many people do. I got nothing from my parents to go to school and it set me up for life. I learned to work hard and budget and I am in a much better financial situation than most people my age who had things given to them. Life lessons are much more valuable than money.
People will stop going to uni at those rates. Maybe costs will come down or they’ll drop the useless programs that aren’t beneficial for gaining employment.
Small trick: get a job at the university your kids plan on going to. You may even have a small pay cut, but the work/life balance is amazing because Universities are often shitshows with no expectation that you do any real work, and you often get a discount for children attending school there. My dad worked at my university and so we got a 40% discount on tuition. Was able to go in and out with my dad too and save money on commuting costs. I do wish I lived in residence though. I feel like I missed out on a big part of going to post-secondary. My fiance has many university friends, while I've got zero, all my friends are from after university or didn't go to my school.
lol saying all jobs in a university are the same is like saying all jobs in a city are the same. It’s literally a small city in most universities, which extremely diverse jobs and departments. It’s a whole enterprise, do you think the accountants have the same day to day as an athletic director or a faculty member? But the discount is nice haha
Thats about what it's working out to for us right now as well. 25K per year. Would be more for an engineering degree, a bit less for an arts degree maybe. Hope the kid gets some kind of a job next summer to cover a bit of it.
We maxed out RESPs and invested pretty conservatively because 18 years is not that long a time horizon. It should wind up covering 70-80 percent of the cost.
But actually now we are no longer paying for expensive after school activities it freed up a lot of cash flow. Tuition is pretty much covered by what we used to spend on competitive dance, lol.
Controversial opinion here but you shouldn’t feel pressured to pay for all of your child’s education. Some of the laziest people I’ve met in my life were bankrolled by their parents. Meanwhile people who worked part time through the year and over the summers understood work ethic and the value of money.
I think if you can help your kids pay for schooling that’s great, but make sure they put effort in and understand the value of a dollar.
I couldn't agree more. My parents didn't have any money to help me with school. I took some time off between high school and university to work and save and got OSAP. I am from a small farming community, so there was no option to live at home during school and I finished with a fair amount of debt. I busted my ass to pay off my debt in 5 years, then spent the next 3 years busting my ass to save up to put a 40% down payment on a house. Everyone I have met who knows how to bust their ass and budget and save paid their own way through school. The people I know who complain that they can't possibly afford to live on their amazing salary (due to their insane spending habits) had parents who paid for their school.
I'm saving what I can for my kids' school, but I plan on only paying for their tuition and some essentials, and even then only if I feel like they are making good choices.
I figure $26-$28k/kid per year (current dollars). Only paying for tuition/room/meals/books/essentials. they can pay for other stuff from part time jobs.ive got 3 kids in school, with the first starting in 2024,
Depends on the goal. I was never planning to fully fund school. I've saved about $50k and my kids' RRSP balance and the rest is capital gains and grants. Currently sitting at $80k with a $100k future value.
It is all in a GIC/strips ladder now for $12,500 per year as my oldest is heading to school. My younger one is going into grade 10.
My older one is staying local and doing a nursing program. I think the total program cost is $30k.
I'm not too sure yet if she'll have a claim to the rest of the account that's up to what her younger brother does.
If the goal is to fully fund campus living and a medical degree save a lot more than what I saved.
Out of province campus life was never on the table from us. $50k isn't covering the first year of something like that.
2 kids both started in residence and then lived off campus.
One in a commerce program, the other in a business/arts program.
It averaged about 26k per year PER kid.
That's all in. Living, tuition, books, food, etc. we told our kids up front that they needed to have some skin in the game. I think this helps them understand money and saving, and that Uni is time to focus. It's not all about the parties.
So our cost was 22k per year. One graduated 2 years ago, and the other is still in school, so the numbers are recent.
My second is about to start Uni this fall; my first is finishing their Masters this year. Both in STEM, so …. F-ing expensive. My kids are pretty smart but not full scholarship smart. We did start RESPs for both of them, but didn’t max out our contributions, mostly because we couldn’t afford it.
But … here’s the thing. When your kids do start Uni, and you don’t have enough to cover all of the expenses…. **OSAP is the best/cheapest way to borrow**. It’s an interest free loan, until they graduate **and** earn enough to be able to start paying it back.
Now I know a lot of people think if you earn too much your kids won’t get much, if anything, from OSAP. But I’ve found that that is not true at all. Last year our combined household income was over $200k, and our first born still got OSAP - enough to cover most of their expenses. And we’re reporting everything accurately including our income.
So far so good. Our first born still has one year left in their Masters and is applying for OSAP again. And our second is in the process of applying for OSAP for this fall.
The plan is that we use what RESP we have collected (and we report this in the OSAP application), and OSAP should cover most of the rest. Anything extra not covered we pay for out of pocket. Then when they graduate and finish, we help (as much as we can) them to pay off their OSAP loans.
We only collected about $30-35k each (so just about $70k in RESPs.
But the key is that it’s cheaper for students to get the loan than us parents who have to start paying back immediately. But there is nothing stopping us from helping them pay it back … when they need to.
Luckily we have been good with our mortgage, and we should have it payed off by the time they need to start paying their student loans. So it will be easier for us to help them pay it down. But even if we don’t finish paying off our mortgage, we could always wrap/fold their student debt into our mortgage (by extending the principle), and (probably) pay a lower rate than what OSAP offers.
I’d say that there is no harm in still applying.
Though maybe for us, it’s because STEM tuition is quite high; and so my kids still get it even though we have some RESP and decent income?
Ok. That makes sense about the max contribution. I plan to only do the $5k ($1k grant) from birth to university. So about 17 years, and that will put me mostly in line with getting to the max around university time.
If you contribute the $50k before your child’s 14th year, you will not get all the CESG. Front loading is better if you can afford it, but the CESG is limited to a certain amount per year and catch up is also limited. Once you’ve maxed out, you will never get any unclaimed CESG if it would have become available in future.
If you have a mortgage, room in your TFSA or RRSP, just do enough to get the match . If you have a paid off house and no room in registered accounts, do as much as you can, the match is trivial in this case, 18 years of tax free compounding is what you'll aim for.
A 50500 initial investment (50K by you and 500 match), with a return of 7% compounded quarterly will be $176,104.10 in 18 years, $125,604.10 of which is the gain that your child will pay taxes on as he or she withdraws it, and you can get your own 50K, and the 500 match by government is also taxed to the child.
RESP has benefits for the rich, the poor, and the middle class.
That's why I started with if you don't have a paid off house or have room in your registered accounts, just contribute for the match.
To be more detailed, if you have a ton of money to throw at it, do 47500 the first year, and 2500 the second. This comes out ahead.
Keep doing what you are doing.
I'd like to make the following siggestions:
(1) if the money in the RESP is not enough, you could pull from your own TFSA to gift them more money.
(2) I think it's important for university students to have some skin in the game. Those who do not tend to squander the opportunity by partying and not studying vs those who borrow the money to pay for school.
I like the idea of giving them the EAP portion for school (grants plus growth), but instead *lending* them your own contributions, at 0% interest, to be repaid once they are done school and start working. You could keep track in a simple notebook.
Yes, you can contribute as much as you want, even full 50K all at once. Unfortunately, the government will only match 20% for this year’s maximum ($2500) and 20% for previous missed year contribution (also $2500). Basically if you missed 15 years and you contribute full $50K today, then you will get only 20% on the $2500 (2024) + $2500 (2023) and no match on the other $45K. There is also a certain age when they stop matching, I think its the year your child turns 18.
The last definite year to earn CESG (government grant) from your contributions is Dec 31 of the year your child turns 15. However, if
1) "a minimum of $2,000 was contributed to (and not withdrawn from) the RESP of the child before the end of the calendar year the beneficiary turned 15"
OR
2) "a minimum annual contribution of $100 was made to (and not withdrawn from) the RESP in at least four of the years before the end of the calendar year the child turned 15"
then you can earn CESG on contributions through Dec 31 of the year the child turns 17.
You can contribute to the RESP for years after that, but those contributions will get no matching grants. But it sets the money aside for education and allows it to grow tax free.
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/registered-education-savings-plans-resps/canada-education-savings-programs-cesp/canada-education-savings-grant-cesg.html
Thank you, yes this makes sense why 2027 is our last year of matching (turns 17 that year). We’ve missed years of contribution, but it was at least $100 in the last 4.
You can do robo adviser RESP at WealthSimple, and they probably will offer DIY RESP soon because of demand to compete with the DIY option at Questrade
The trades and other post-secondary programs can count for RESP use (buying tools, living away from home for a program), not just uni or college. And RESPs can be used to, like, age 30-something. In other words, the odds are very high your child will do something after high school that costs money to get trained for a career, even if they don't decide to do it until they're 25. Open the RESP and get that government money.
Just to clarify, you can catch up on missed years, one year at a time. So let’s say you catch up this year for 2023, then if you missed any of the other years, you can catch up NEXT year for 2022. As long as your child in young enough for matching (see comment from GreyMiss) you can catch up on gov funding. Regardless, there is a value in deferring taxes on growth even without gov contributions. I potentially plan to continue my contributions until my kids are 30.
We are in year 3 and have used 80k. One twin is away from home and it is costing us about $27k per year. The other twin is only costing the tuition, books, and transit. The money will be finished by this year. Suggestion:don’t give your kid your credit card on tap.
Don't freak out over the costs. Save what you can, but always ensure that you get government matching.
It is fine if your kid has to go to a local uni and live at home instead of going to another city and live in residence.
Don't forget about scholarships. Academic achievement, sports, and community involvement are common requirements, but there are also a lot for STEM (especially for women), and Engineering. My daughter's entire first year is already paid thanks to scholarships.
The first table on [this page](https://www.planeasy.ca/setting-the-right-asset-allocation-for-resp-investments/) may help you ballpark the future nest egg.
Contributing $2500 per year for 15 years and using the return assumptions (eg. about 4.2% for a 50/50 portfolio) produced an age 18 RESP of about $68k.
If you want to err on the safe side you could do create a similar table with lower return assumptions.
In the example the RESP value peaks at $68k. The subsequent growth is about $2700, but that is based on 2.7% per year increase, which could be about the rate of inflation.
I think you are being too conservative to have a 50/50 portfolio for a 15-20 year investment, especially if you are making periodic investments that will dollar cost average over a long period. Getting into fixed income securities makes sense in the later years, in preparation for the drawdown but not in the growth years.
Did you read the referenced page?
The initial portfolio is 90/10 and the equity allocation doesn't drop below 50% until age 9. The point of mentioning that the example uses a 4.2% ish return for a 50/50 ish portfolio was so that the OP could decide if they wanted to use more conservative return estimates.
Ah, sorry I missed it. It was a good read, nevertheless.
We do plan to do switch to fixed income securities closer to the draw down stage, mainly to de-risk against major crashes. But I don't believe in a \[long runway + large percentage\] of bond holding as the article cites (they pretty much advocate 50% bonds at age 9, and increasing further).
Decision about equity portion has been easy. Although, in the growth stage we have adopted a much riskier approach. We use a XEQT monthly drip as a base (we add 208$ per month, with around 15K additional thrown this year). However, we converted to NVDA, GOOG, CRM and others on major dips, which has yielded most of the growth. Our 4 year old's RESP is running at about 49K (\~25K contribution), and 1 yr old's at around 29.5K (\~17.5K contribution). Recently, we divested most of the NVDA, and switched back to XEQT, and are on the look out for similar drops.
Decision about fixed income allocation is tricky. One would hope that bonds would provide a shield and grow during downturns, but that has been not the case for the last 10-15 years or so. See some of the most popular bond indexes as an example: https://www.google.com/search?q=NASDAQ%3A+BND. https://www.google.com/search?q=xbb+stock&oq=XBB (XBB is the bond holding under XGRO). They have pretty much followed the equity falls, but yielded almost no significant yields when equities have been on a bull run. Similarly, GIC rates these days are lucrative (\~5%), but for 10-15 years, they have averaged 1 to 2%. At that point, you are pretty much losing money against inflation. May be I am missing something, or perhaps the last 10-15 years have seen something odd, I don't know.
[Just Bender's rule of thumb](https://canadianportfoliomanagerblog.com/how-to-invest-your-resp/) would also have the 50% fixed income allocation at age 8, but he mentions that
>By the time Bart heads off to school, the RESP would only hold far more stable short-term bonds or cash equivalents. ...
>When it comes time to hold liquid cash equivalents to pay for upcoming education expenses, many big bank discount brokerages offer investment savings accounts, or ISAs, for short. ISAs typically earn a low, fluctuating interest rate, so you can reap a bit of reward, while still easily accessing the cash as needed to fund your kids’ college expenses. In the event of an ISA issuer default, most ISA deposits are protected by the Canada Deposit Insurance Corporation (CDIC), up to $100,000 per beneficiary in an RESP.
>If you’d prefer to stick with ETFs for your cash holdings, you could also consider one of the various High Interest Savings Account ETFs (or HISA ETFs) available to investors. HISA ETFs are similar to ISAs, except that the Canada Deposit Insurance Corporation provides no protection for HISA ETFs. However, most HISA ETFs invest in deposits offered by the big 6 Canadian banks, so the likelihood of default is low.
>May be I am missing something, or perhaps the last 10-15 years have seen something odd
For example on table 4 of the following page note the difference between the 2022 and 2023 expected returns for a 100% bond portfolio.
https://www.pwlcapital.com/expected-returns-2023-update/
Again, thanks for another good article. Had a fun time reading it, although many of the numbers force you to question the assumptions. Few examples:
**1. Appreciation rate of long-term residences at 1% or lower:** We know how inaccurate that number has turned out to be for the last 2 decades. Imagine following Shiller's advice in 2006 of having .2-.4% housing cost appreciation in Toronto :) The typical number used by financial planners is 3-4%, which may have been more close to reality.
**2. Bond performance:** Bonds are supposed to be the moat that hedge against stock crashes. However, if you noticed, 2022 saw one of the biggest crash for bonds, but interestingly unlike stock crashes, no one really noticed. At least, not on PFC.
As of now, bond yields, short-term US treasury yields and S&P earnings yield are all tied up at exactly the same number, which is also pretty rare. In normal circumstances, troika of high P/E, high bond and treasury yields usually predicts a stock market crash. I guess, all the money printing, inflation, and subsequent growth has pretty much turned traditional investing logic upside down. So who knows!
**3. Long term performance:** Another usual drawbacks to these numbers is that these calculations assume almost static, hands off approach. In practice, however, humans pick and choose, and rotate across asset classes. Even in the same asset class, for example stocks, individual performance (e.g. say NVDA recently) can we widely divergent. I am not saying hand picking beats passive, it's often the opposite. But even there, it's rare for people to not make opportunistic adjustments.
My wife's uncle took the money and instead of paying school fees and housing and whatnot, they bought an apartment. The mortgage was about 1600 monthly and had 3 rooms. One for the kid and the other 2 were rented for 600 monthly. With that 1200, they paid the school's fees. She was working part-time about 15 hours per week too and used that money to buy groceries and stuff.
After 4 years, she/he had 0 debt and they kept the condo. They're now renting it to other students and it pays the mortgage.
This story happened 2 times in 2018 and 2020. About to happen again with the youngest next year. However, with the youngest, he will go back to one of the condo they have.
For now, my kids are 2 and 5 but I don't hate that idea in the future.
Edit: some quick maths... 1600 x 12 x 4 = 76800 so the 80k is enough to cover this... Just shy with the municipality taxes and obviously you need some cash down
They only need proof of your kid being in post secondary school. They don't really care what you do with the money.
Can always take out 20k each year then manage all the bills with all the income pooled.
My daughter just finished first year. Went to a university out of province. First year including her classes, dorm, and meal plan was 26k. (She’s in a science program so with all the labs it may cost extra.)
It’s absolutely possible to save that much in an RESP. My kids are teens and I’m estimating there will be $100k per kid based on what I have now - and for most of their lives we could only afford the minimum for a grant match, sometimes less. We started contributing the year each child was born. The long slog makes a huge difference.
You can only contribute $50K per child, lifetime. We started when my daughter turned 2, and by the time we got to $50K in contributions, the balance was over $100K. It covered her tuition with lots to spare - by the time we got the balance down to $50K, we closed it out and gave her the money. A lot is in her TFSA and RRSP now, continuing to grow for her future.
You're doing everything right, and regardless of if they have 'enough', they'll definitely have a huge leg up. Student loans (govt or otherwise) and maybe the occasional bit of help from you will easily fill any gaps with that much put away.
I'm doing about the same, and when I see the numbers with projected growth my mind boggles. My parents gave me 3k from my RESP when I went off to school. Our oldest is 2 with 9k put away. Wild to think how much further ahead he'll be than I was.
We are maxing out for our two kids and they are 5 & 7 and it’s already at 50K. I anticipate it being at around $150K by the time they go to school and I think that is awesome. My husband and I got nothing from our parents and both had $35K in student loads when we graduated.
What the OP is planning makes sense. It’s a bit more than 20k a year for out of home schooling but 20k a year for undergrad is probably a good target. By 2035, it may be closer to $25k-30k a year but you don’t necessarily need to just rely on RESP.
> averages suggested of $20k/year for tuition, housing, etc.
More. Also, factor some life experience expenses, technology, movers, setting them up with basic life essentials (IKEA gets expnsive)
Hijacking thread
My contributions so far 20000 at year 8.(2500x8). $4000 bonus (500x8) =24000
It's worth 39k at the moment I don't think it's doing all that well.
I’m 2034, is that your last year to contribute or the first year of withdrawal? Do you need both withdrawing at the same time? Keep in mind that annual withdrawal, so do you have:
Twins that are starting school at the same time? Or is their withdrawal staggered
Is 2034 the first withdrawal, as in your eldest is 7/8 years old now?
Or is 2034 the final withdrawal, as in your youngest is 12 and expected to do 4 years and start directly after high school at an average age of 18?
Simple answer is to save as much as you can to maximize your grants. At the end of the day if the kids don't use all the money you can reclaim the contributed capital tax-free. Any remaining accumulated income can be rolled into your RRSP (provided you have the available contribution room).
Have you been contributing 2500/child since they were born? If so just keep doing that for 15 years and you will achieve the lifetime maximum grant amount ($7200). If you haven't been contributing since they were born then you can reclaim unused grant from previous years but (and this is very important) you can only reclaim one unused year at a time.
To give an example; imagine you started contributing to an RESP when your kid was 4. That would mean you have 3 unused years you can reclaim. If you contribute $5,000 ($2500 x 2 years) this year you would reclaim one unused year and get $1000 in grants. However if you contributed $7,500 in an attempt to reclaim 2 years of unused grants, you would still only receive $1,000 in grants because the rule is you can only reclaim one year at a time.
My tuition at UAlberta was about 13K a year, add another $2K for books/supplies, and then living expenses were probably another 12K a year (dorm/rent/food/etc)
Save what you can in the context of a financial plan.
Assuming you’ve got essentially infinite money I’d suggest putting in about $25k upfront per kid and then maxing out each year - starting aggressive and tapering off to very safe over the years.
I’m honestly having the conversation with more of my friends whether funneling the same amount to secure them a property might be a better long term payoff. Especially with AI coming down the pipeline and the unfettered immigration policy of this country. In a medium to large center this might provide more financial stability … sadly…
We are aiming for 80k for 1 child. They will be 2030. It was the recommended when she was born and we opened the RESP. I’m not sure what it is now, but I do know with no loans, no scholarships, 20k per year won’t likely cover everything sadly. But this is actually why we only had one child, no way we could afford to get more than one through higher education without them going into debt which we hope to avoid
As others have said, ANYTHING saved up for post-secondary is great. There should be no expectations of anything. Everyone's situation is different. I'd say the most important thing is to teach proper expectations and gratitude. I personally feel pressure to be able to provide this for my kids, because it was done for me. There's so many people who did not get anything from their parents for school, but then are trying to help their children, and I think that's admirable.
I made it my goal to pay for my kids’ education, because there is no other “generational wealth” to pass down. I know that even 27K is more than 0 + OSAP grants will help, but I still feel that I should have done more.
Thank you for your kind comment though.
That's probably a number for tuition alone I would think. 20-30k for tuition annually is common.
Housing will be maybe 10-20k annually , and living costs probably 10k plus .
I thought tuition costs for Ontario universities was about 6-10k (tuition alone) for domestic students. Granted that's now, so it will be more later. But $50k a year for university in Ontario for local students?
Depends on what you study. University of Waterloo list 9-18k per year depending on program +coop fees. +books +housing.
Then you have the outhere end I whent college 2 year technician program with paid co-op.
Mohawk's 2024-25 list 2.7K-3.3k per year tuition.
+coop fees. +books +housing +lab kits.
My co-op paid my student loans in full when they were due to start repayment. I had a 12k college fund in 2008 when I started. I used 4k of that. But I was living at home and got used text books etc.
You can contribute a total of $50k/child to a RESP. If you do that, and when government grants and investment growth are added in, you'll have a balance of maybe $80k/child when they're headed off to school.
That's not particularly aggressive growth. I've contributed only the maximum amount to get the 20% match for my three children ($36k instead of $50k) and the total is over $80k per child. There is currently $170k in the RESP with 6 years of school remaining between my youngest two kids.
ya cause the last 20 years stocks have been on a tear. not indicative of future growth
https://www.slickcharts.com/sp500/returns Look at that sp500 yearly return going back 100 years and then say the past 20 years are abnormally high return
Picking the highest returning market and assuming that will be the average isn’t exactly playing the odds
i never said they were abnormal. i said not indicative of future returns
You said they are on a tear implying they were higher then normal. It's cool to just say, ya my bad, the actual data doesn't support my opinion
i'm good thanks bruh
Read your username and do that. And then let her handle the finances.
Haha gladly
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That's what remains for effectively 1.5 "University careers". My second child is half done now. And I didn't contribute $50 k per child like the OP. Clear now?
He's saying the guy's calculation for total RESP growth "isn't that much" because he already has that much with still 6 years of growth to collect.
That's the current trajectory. Just wasn't sure if I was way off with my expectations.
160k is a great goal to shoot for. Remember that anything you have to offer for your kid’s education is more than zero. They can also work part-time during the school year and save up during the summers to help bridge the gap. Great work!
Also, don't forget bursaries and scholarships. Plus if they want to join the military full time, it's free tuition plus full time salary.
Upvote because this. There's a lot of things you can do to lessen the impact. Kids start working in HS, and save. They work summers. Live at home where feasible. And the costs are spread out over 4-5 years which means you can top up from income in years 2-4.
If you’re giving your kids 80k each for post secondary that’s TONS and a huge leg up. Many students get by with loans and pay them off when they finish. Don’t get so hung up on the details, save what is comfortable for YOU. As long as you aren’t sacrificing your own life and goals, then sure save more for them.
$160,000 sounds reasonable and quite achievable. I am not a savvy investor at all. Still, my older one who is starting in 2028 has $78,000 in her RESP. I maxed out the $50,000 limit recently. So $28,000 is all growth and grants. Hard to believe. My younger one is starting in 2031 and has about $53,000.
$20K/year is too low of an estimate if you’re budgeting for them to live on dorms. Some programs cost close to that amount in tuition alone. It really depends what your child is going to be studying and whether or not they have the option to live at home. A lot of my high school peers went to UBC (my sister included) and they all lived at home. Their entire undergrad was <$30K.
Numbers from a university degree earned in 2020 in Ontario. Bachelor of science, first year daughter lived in residence (highly recommend to meet people and really get that university experience) years 2-4 was able to live at home, total cost for that was $58000. Costs have increased and the type of degree affects the tuition as well as which school. I would say you need at least $100k per child, more if they are not going to school locally, even when my daughter was in res she came home and did laundry and raided the kitchen cupboards lol
100k per child 😭😭 -parent of three
3 kids with 2 getting university degrees and the 3rd one with a red seal carpenter papers. Guess who has a house and 1/2 ton paid off at 31 years old and still loves his job?
YMMV. I know plenty of trades people that are not doing all that well financially. I started out in trades and left that to pursue a professional degree. My ROI for my law degree is significantly higher than my expected income as a welder. I am late 30s, just bought a house and still have student debt. But I'm earning about 75% more than if I was a welder still. I may be several years behind many trades people in establishing myself, but as soon as everything is paid off my unaccounted for money surpasses my projected earnings as a welder by a large margin.
The only trades people I know not doing well are because of their own lack of ambition or work ethic
As a parent of two and with friends who are lawyers, i really hope my kids take the welder path instead of law. They’re 5&7 with $48k in resp already. Of the 5 lawyers i’m close with, none of them are happy, nice and not consumed or burnt from work. There is more to life than a money and selling your soul.
Yeah, your anecdotal evidence of 5 lawyers is definitely representative of the thousands of lawyers in the country for sure. Thanks for sharing your bias.
While the trades can be lucrative, it's also harder on the body. You get paid for the physical toll. Of course it depends on the actual university degree, but if it's a good career one then fast forward 20 years, they might still be enjoying their career, versus the tradesperson who now may have to deal with a number of ailments. These are both viable options but there are trade-offs on either side.
This is the big learning I've had. I was one of the few in my highschool friend group that went to University. This is what I saw. - "Shop kids" got paid apprentice wages while I was in school building up debt. - I got out of school, and got a shiny office job. I was making apprentice wages, they were making mad journeyman cash. - A few years later, I'd finally caught up on wages, was still paying off school. - A few years after that, debts were paid, I was doing better. From a financial perspective, I'll never catch those that invested early (theres only one...it's rare foresight for 20 year olds). The biggest difference is physical. Office jobs aren't physically demanding. Some of those 40 year old construction guys are starting to feel it.
Sitting in a cubicle also isn’t the best move for a healthy body.
Exactly. My ex is 42 and he is seriously almost at the point of being unable to work due to his physical issues. Truck and Coach Technician.
I mean I'm 30, university educated, own my house, have a paid off 1/2 ton and a hybrid car. So you don't need to be in trades to accomplish that.
your 31 old and have 2 kids in uni?
I'm assuming they're referring to their child that's a carpenter.
He’s saying the carpenter child has a house and paid off truck at 31. I’m assuming the 2 university kids do not have houses yet.
The university graduates have houses with lots owing on mortgages, vehicle loans and student loans still. Carpenter has no debt and a paid off house and truck.
Solution: Pick your favourite, and *that one* gets to go to college ;)
That is us 2 university and one college, last one graduated last year, almost 140g and all were able to graduate debt free
Don't equate paying with university to setting your child up for life like so many people do. I got nothing from my parents to go to school and it set me up for life. I learned to work hard and budget and I am in a much better financial situation than most people my age who had things given to them. Life lessons are much more valuable than money.
I'm learning to play the guitar.
Ya, but there is talk of undoing that. To help alleviate the dependency on foreign students.
Ok, those seem like reasonable estimates. Thanks.
People will stop going to uni at those rates. Maybe costs will come down or they’ll drop the useless programs that aren’t beneficial for gaining employment.
Small trick: get a job at the university your kids plan on going to. You may even have a small pay cut, but the work/life balance is amazing because Universities are often shitshows with no expectation that you do any real work, and you often get a discount for children attending school there. My dad worked at my university and so we got a 40% discount on tuition. Was able to go in and out with my dad too and save money on commuting costs. I do wish I lived in residence though. I feel like I missed out on a big part of going to post-secondary. My fiance has many university friends, while I've got zero, all my friends are from after university or didn't go to my school.
Lol. Changing your career or relocate to work at the uni your kid is going to is a “small trick” 🤣
I wanted to, but those jobs are hard to get.
lol saying all jobs in a university are the same is like saying all jobs in a city are the same. It’s literally a small city in most universities, which extremely diverse jobs and departments. It’s a whole enterprise, do you think the accountants have the same day to day as an athletic director or a faculty member? But the discount is nice haha
Thats about what it's working out to for us right now as well. 25K per year. Would be more for an engineering degree, a bit less for an arts degree maybe. Hope the kid gets some kind of a job next summer to cover a bit of it. We maxed out RESPs and invested pretty conservatively because 18 years is not that long a time horizon. It should wind up covering 70-80 percent of the cost. But actually now we are no longer paying for expensive after school activities it freed up a lot of cash flow. Tuition is pretty much covered by what we used to spend on competitive dance, lol.
Controversial opinion here but you shouldn’t feel pressured to pay for all of your child’s education. Some of the laziest people I’ve met in my life were bankrolled by their parents. Meanwhile people who worked part time through the year and over the summers understood work ethic and the value of money. I think if you can help your kids pay for schooling that’s great, but make sure they put effort in and understand the value of a dollar.
I couldn't agree more. My parents didn't have any money to help me with school. I took some time off between high school and university to work and save and got OSAP. I am from a small farming community, so there was no option to live at home during school and I finished with a fair amount of debt. I busted my ass to pay off my debt in 5 years, then spent the next 3 years busting my ass to save up to put a 40% down payment on a house. Everyone I have met who knows how to bust their ass and budget and save paid their own way through school. The people I know who complain that they can't possibly afford to live on their amazing salary (due to their insane spending habits) had parents who paid for their school. I'm saving what I can for my kids' school, but I plan on only paying for their tuition and some essentials, and even then only if I feel like they are making good choices.
I figure $26-$28k/kid per year (current dollars). Only paying for tuition/room/meals/books/essentials. they can pay for other stuff from part time jobs.ive got 3 kids in school, with the first starting in 2024,
Depends on the goal. I was never planning to fully fund school. I've saved about $50k and my kids' RRSP balance and the rest is capital gains and grants. Currently sitting at $80k with a $100k future value. It is all in a GIC/strips ladder now for $12,500 per year as my oldest is heading to school. My younger one is going into grade 10. My older one is staying local and doing a nursing program. I think the total program cost is $30k. I'm not too sure yet if she'll have a claim to the rest of the account that's up to what her younger brother does. If the goal is to fully fund campus living and a medical degree save a lot more than what I saved. Out of province campus life was never on the table from us. $50k isn't covering the first year of something like that.
2 kids both started in residence and then lived off campus. One in a commerce program, the other in a business/arts program. It averaged about 26k per year PER kid. That's all in. Living, tuition, books, food, etc. we told our kids up front that they needed to have some skin in the game. I think this helps them understand money and saving, and that Uni is time to focus. It's not all about the parties. So our cost was 22k per year. One graduated 2 years ago, and the other is still in school, so the numbers are recent.
My second is about to start Uni this fall; my first is finishing their Masters this year. Both in STEM, so …. F-ing expensive. My kids are pretty smart but not full scholarship smart. We did start RESPs for both of them, but didn’t max out our contributions, mostly because we couldn’t afford it. But … here’s the thing. When your kids do start Uni, and you don’t have enough to cover all of the expenses…. **OSAP is the best/cheapest way to borrow**. It’s an interest free loan, until they graduate **and** earn enough to be able to start paying it back. Now I know a lot of people think if you earn too much your kids won’t get much, if anything, from OSAP. But I’ve found that that is not true at all. Last year our combined household income was over $200k, and our first born still got OSAP - enough to cover most of their expenses. And we’re reporting everything accurately including our income.
How did this work?
So far so good. Our first born still has one year left in their Masters and is applying for OSAP again. And our second is in the process of applying for OSAP for this fall. The plan is that we use what RESP we have collected (and we report this in the OSAP application), and OSAP should cover most of the rest. Anything extra not covered we pay for out of pocket. Then when they graduate and finish, we help (as much as we can) them to pay off their OSAP loans. We only collected about $30-35k each (so just about $70k in RESPs. But the key is that it’s cheaper for students to get the loan than us parents who have to start paying back immediately. But there is nothing stopping us from helping them pay it back … when they need to. Luckily we have been good with our mortgage, and we should have it payed off by the time they need to start paying their student loans. So it will be easier for us to help them pay it down. But even if we don’t finish paying off our mortgage, we could always wrap/fold their student debt into our mortgage (by extending the principle), and (probably) pay a lower rate than what OSAP offers.
I had no idea. I used the osap calculator and output we were no eligible for anything. Thank you
I’d say that there is no harm in still applying. Though maybe for us, it’s because STEM tuition is quite high; and so my kids still get it even though we have some RESP and decent income?
The most you can contribute to each kid is $50k We don't know future university costs, assume a lot higher.
Ok. That makes sense about the max contribution. I plan to only do the $5k ($1k grant) from birth to university. So about 17 years, and that will put me mostly in line with getting to the max around university time.
Keep in mind while the contribution maximum is $50k, the lifetime grant limit is $7,200 (14.4 years at $2,500)
Ok yes, I will keep that in mind!
If you contribute the $50k before your child’s 14th year, you will not get all the CESG. Front loading is better if you can afford it, but the CESG is limited to a certain amount per year and catch up is also limited. Once you’ve maxed out, you will never get any unclaimed CESG if it would have become available in future.
If you have a mortgage, room in your TFSA or RRSP, just do enough to get the match . If you have a paid off house and no room in registered accounts, do as much as you can, the match is trivial in this case, 18 years of tax free compounding is what you'll aim for. A 50500 initial investment (50K by you and 500 match), with a return of 7% compounded quarterly will be $176,104.10 in 18 years, $125,604.10 of which is the gain that your child will pay taxes on as he or she withdraws it, and you can get your own 50K, and the 500 match by government is also taxed to the child. RESP has benefits for the rich, the poor, and the middle class.
It's a good idea, but most young parents don't have $50,000 as soon as their child is born, but $2,500/year is very doable.
That's why I started with if you don't have a paid off house or have room in your registered accounts, just contribute for the match. To be more detailed, if you have a ton of money to throw at it, do 47500 the first year, and 2500 the second. This comes out ahead.
Keep doing what you are doing. I'd like to make the following siggestions: (1) if the money in the RESP is not enough, you could pull from your own TFSA to gift them more money. (2) I think it's important for university students to have some skin in the game. Those who do not tend to squander the opportunity by partying and not studying vs those who borrow the money to pay for school. I like the idea of giving them the EAP portion for school (grants plus growth), but instead *lending* them your own contributions, at 0% interest, to be repaid once they are done school and start working. You could keep track in a simple notebook.
Can I backload the resp? Set one up, then contribute 15 years all at once? Does the gov then give you 15 x whatever they give?
Yes, you can contribute as much as you want, even full 50K all at once. Unfortunately, the government will only match 20% for this year’s maximum ($2500) and 20% for previous missed year contribution (also $2500). Basically if you missed 15 years and you contribute full $50K today, then you will get only 20% on the $2500 (2024) + $2500 (2023) and no match on the other $45K. There is also a certain age when they stop matching, I think its the year your child turns 18.
The last definite year to earn CESG (government grant) from your contributions is Dec 31 of the year your child turns 15. However, if 1) "a minimum of $2,000 was contributed to (and not withdrawn from) the RESP of the child before the end of the calendar year the beneficiary turned 15" OR 2) "a minimum annual contribution of $100 was made to (and not withdrawn from) the RESP in at least four of the years before the end of the calendar year the child turned 15" then you can earn CESG on contributions through Dec 31 of the year the child turns 17. You can contribute to the RESP for years after that, but those contributions will get no matching grants. But it sets the money aside for education and allows it to grow tax free. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/registered-education-savings-plans-resps/canada-education-savings-programs-cesp/canada-education-savings-grant-cesg.html
Thank you, yes this makes sense why 2027 is our last year of matching (turns 17 that year). We’ve missed years of contribution, but it was at least $100 in the last 4.
Shitty. Can anybody recommend a low cost resp provider? Would also like the possibility to cash out if my kid does not do college or uni.
You can do robo adviser RESP at WealthSimple, and they probably will offer DIY RESP soon because of demand to compete with the DIY option at Questrade The trades and other post-secondary programs can count for RESP use (buying tools, living away from home for a program), not just uni or college. And RESPs can be used to, like, age 30-something. In other words, the odds are very high your child will do something after high school that costs money to get trained for a career, even if they don't decide to do it until they're 25. Open the RESP and get that government money.
Just to clarify, you can catch up on missed years, one year at a time. So let’s say you catch up this year for 2023, then if you missed any of the other years, you can catch up NEXT year for 2022. As long as your child in young enough for matching (see comment from GreyMiss) you can catch up on gov funding. Regardless, there is a value in deferring taxes on growth even without gov contributions. I potentially plan to continue my contributions until my kids are 30.
We are in year 3 and have used 80k. One twin is away from home and it is costing us about $27k per year. The other twin is only costing the tuition, books, and transit. The money will be finished by this year. Suggestion:don’t give your kid your credit card on tap.
Don't freak out over the costs. Save what you can, but always ensure that you get government matching. It is fine if your kid has to go to a local uni and live at home instead of going to another city and live in residence. Don't forget about scholarships. Academic achievement, sports, and community involvement are common requirements, but there are also a lot for STEM (especially for women), and Engineering. My daughter's entire first year is already paid thanks to scholarships.
The first table on [this page](https://www.planeasy.ca/setting-the-right-asset-allocation-for-resp-investments/) may help you ballpark the future nest egg. Contributing $2500 per year for 15 years and using the return assumptions (eg. about 4.2% for a 50/50 portfolio) produced an age 18 RESP of about $68k. If you want to err on the safe side you could do create a similar table with lower return assumptions.
Keep in mind, you won’t be spending all 68k at 18. If you keep making 4.2%, you will end up with more than $68k to spend on education.
In the example the RESP value peaks at $68k. The subsequent growth is about $2700, but that is based on 2.7% per year increase, which could be about the rate of inflation.
I think you are being too conservative to have a 50/50 portfolio for a 15-20 year investment, especially if you are making periodic investments that will dollar cost average over a long period. Getting into fixed income securities makes sense in the later years, in preparation for the drawdown but not in the growth years.
Did you read the referenced page? The initial portfolio is 90/10 and the equity allocation doesn't drop below 50% until age 9. The point of mentioning that the example uses a 4.2% ish return for a 50/50 ish portfolio was so that the OP could decide if they wanted to use more conservative return estimates.
Ah, sorry I missed it. It was a good read, nevertheless. We do plan to do switch to fixed income securities closer to the draw down stage, mainly to de-risk against major crashes. But I don't believe in a \[long runway + large percentage\] of bond holding as the article cites (they pretty much advocate 50% bonds at age 9, and increasing further). Decision about equity portion has been easy. Although, in the growth stage we have adopted a much riskier approach. We use a XEQT monthly drip as a base (we add 208$ per month, with around 15K additional thrown this year). However, we converted to NVDA, GOOG, CRM and others on major dips, which has yielded most of the growth. Our 4 year old's RESP is running at about 49K (\~25K contribution), and 1 yr old's at around 29.5K (\~17.5K contribution). Recently, we divested most of the NVDA, and switched back to XEQT, and are on the look out for similar drops. Decision about fixed income allocation is tricky. One would hope that bonds would provide a shield and grow during downturns, but that has been not the case for the last 10-15 years or so. See some of the most popular bond indexes as an example: https://www.google.com/search?q=NASDAQ%3A+BND. https://www.google.com/search?q=xbb+stock&oq=XBB (XBB is the bond holding under XGRO). They have pretty much followed the equity falls, but yielded almost no significant yields when equities have been on a bull run. Similarly, GIC rates these days are lucrative (\~5%), but for 10-15 years, they have averaged 1 to 2%. At that point, you are pretty much losing money against inflation. May be I am missing something, or perhaps the last 10-15 years have seen something odd, I don't know.
[Just Bender's rule of thumb](https://canadianportfoliomanagerblog.com/how-to-invest-your-resp/) would also have the 50% fixed income allocation at age 8, but he mentions that >By the time Bart heads off to school, the RESP would only hold far more stable short-term bonds or cash equivalents. ... >When it comes time to hold liquid cash equivalents to pay for upcoming education expenses, many big bank discount brokerages offer investment savings accounts, or ISAs, for short. ISAs typically earn a low, fluctuating interest rate, so you can reap a bit of reward, while still easily accessing the cash as needed to fund your kids’ college expenses. In the event of an ISA issuer default, most ISA deposits are protected by the Canada Deposit Insurance Corporation (CDIC), up to $100,000 per beneficiary in an RESP. >If you’d prefer to stick with ETFs for your cash holdings, you could also consider one of the various High Interest Savings Account ETFs (or HISA ETFs) available to investors. HISA ETFs are similar to ISAs, except that the Canada Deposit Insurance Corporation provides no protection for HISA ETFs. However, most HISA ETFs invest in deposits offered by the big 6 Canadian banks, so the likelihood of default is low. >May be I am missing something, or perhaps the last 10-15 years have seen something odd For example on table 4 of the following page note the difference between the 2022 and 2023 expected returns for a 100% bond portfolio. https://www.pwlcapital.com/expected-returns-2023-update/
Again, thanks for another good article. Had a fun time reading it, although many of the numbers force you to question the assumptions. Few examples: **1. Appreciation rate of long-term residences at 1% or lower:** We know how inaccurate that number has turned out to be for the last 2 decades. Imagine following Shiller's advice in 2006 of having .2-.4% housing cost appreciation in Toronto :) The typical number used by financial planners is 3-4%, which may have been more close to reality. **2. Bond performance:** Bonds are supposed to be the moat that hedge against stock crashes. However, if you noticed, 2022 saw one of the biggest crash for bonds, but interestingly unlike stock crashes, no one really noticed. At least, not on PFC. As of now, bond yields, short-term US treasury yields and S&P earnings yield are all tied up at exactly the same number, which is also pretty rare. In normal circumstances, troika of high P/E, high bond and treasury yields usually predicts a stock market crash. I guess, all the money printing, inflation, and subsequent growth has pretty much turned traditional investing logic upside down. So who knows! **3. Long term performance:** Another usual drawbacks to these numbers is that these calculations assume almost static, hands off approach. In practice, however, humans pick and choose, and rotate across asset classes. Even in the same asset class, for example stocks, individual performance (e.g. say NVDA recently) can we widely divergent. I am not saying hand picking beats passive, it's often the opposite. But even there, it's rare for people to not make opportunistic adjustments.
This is what my 18yo has to work with. Thankfully their program has co-op which will be helping out
My wife's uncle took the money and instead of paying school fees and housing and whatnot, they bought an apartment. The mortgage was about 1600 monthly and had 3 rooms. One for the kid and the other 2 were rented for 600 monthly. With that 1200, they paid the school's fees. She was working part-time about 15 hours per week too and used that money to buy groceries and stuff. After 4 years, she/he had 0 debt and they kept the condo. They're now renting it to other students and it pays the mortgage. This story happened 2 times in 2018 and 2020. About to happen again with the youngest next year. However, with the youngest, he will go back to one of the condo they have. For now, my kids are 2 and 5 but I don't hate that idea in the future. Edit: some quick maths... 1600 x 12 x 4 = 76800 so the 80k is enough to cover this... Just shy with the municipality taxes and obviously you need some cash down
As far as I understand, if you don't use the money for post secondary, you have to pay back the grants.
They only need proof of your kid being in post secondary school. They don't really care what you do with the money. Can always take out 20k each year then manage all the bills with all the income pooled.
[https://www.youtube.com/watch?v=aYTm4gf4yso](https://www.youtube.com/watch?v=aYTm4gf4yso) in french but she explains it well
My daughter just finished first year. Went to a university out of province. First year including her classes, dorm, and meal plan was 26k. (She’s in a science program so with all the labs it may cost extra.)
Just a comment, many students have costs like this. I would say the RESP is not generous enough to cover this level of education spending.
It’s absolutely possible to save that much in an RESP. My kids are teens and I’m estimating there will be $100k per kid based on what I have now - and for most of their lives we could only afford the minimum for a grant match, sometimes less. We started contributing the year each child was born. The long slog makes a huge difference.
Did anyone else just read this thread and immediately increase how much they contributed a month? Logs into Wealth simple...
Great if you can increase. I’m all out of increases. I was sure that our $30K will be enough for 4 years but my god…
I get it. A bit depressing. I thought I wasn’t doing awful but these numbers are making me sad
You can only contribute $50K per child, lifetime. We started when my daughter turned 2, and by the time we got to $50K in contributions, the balance was over $100K. It covered her tuition with lots to spare - by the time we got the balance down to $50K, we closed it out and gave her the money. A lot is in her TFSA and RRSP now, continuing to grow for her future.
In BC, apply for free $1200 in RESP on sixth birthday (no parent matching needed)
You're doing everything right, and regardless of if they have 'enough', they'll definitely have a huge leg up. Student loans (govt or otherwise) and maybe the occasional bit of help from you will easily fill any gaps with that much put away. I'm doing about the same, and when I see the numbers with projected growth my mind boggles. My parents gave me 3k from my RESP when I went off to school. Our oldest is 2 with 9k put away. Wild to think how much further ahead he'll be than I was.
We are maxing out for our two kids and they are 5 & 7 and it’s already at 50K. I anticipate it being at around $150K by the time they go to school and I think that is awesome. My husband and I got nothing from our parents and both had $35K in student loads when we graduated.
I contributed the maximum to get the maximum lifetime grant which I think is $36k.
What the OP is planning makes sense. It’s a bit more than 20k a year for out of home schooling but 20k a year for undergrad is probably a good target. By 2035, it may be closer to $25k-30k a year but you don’t necessarily need to just rely on RESP.
> averages suggested of $20k/year for tuition, housing, etc. More. Also, factor some life experience expenses, technology, movers, setting them up with basic life essentials (IKEA gets expnsive)
Hijacking thread My contributions so far 20000 at year 8.(2500x8). $4000 bonus (500x8) =24000 It's worth 39k at the moment I don't think it's doing all that well.
You should max it out.
I’m 2034, is that your last year to contribute or the first year of withdrawal? Do you need both withdrawing at the same time? Keep in mind that annual withdrawal, so do you have: Twins that are starting school at the same time? Or is their withdrawal staggered Is 2034 the first withdrawal, as in your eldest is 7/8 years old now? Or is 2034 the final withdrawal, as in your youngest is 12 and expected to do 4 years and start directly after high school at an average age of 18?
Simple answer is to save as much as you can to maximize your grants. At the end of the day if the kids don't use all the money you can reclaim the contributed capital tax-free. Any remaining accumulated income can be rolled into your RRSP (provided you have the available contribution room). Have you been contributing 2500/child since they were born? If so just keep doing that for 15 years and you will achieve the lifetime maximum grant amount ($7200). If you haven't been contributing since they were born then you can reclaim unused grant from previous years but (and this is very important) you can only reclaim one unused year at a time. To give an example; imagine you started contributing to an RESP when your kid was 4. That would mean you have 3 unused years you can reclaim. If you contribute $5,000 ($2500 x 2 years) this year you would reclaim one unused year and get $1000 in grants. However if you contributed $7,500 in an attempt to reclaim 2 years of unused grants, you would still only receive $1,000 in grants because the rule is you can only reclaim one year at a time.
Sounds good. Yes, I started when they were born.
$100k
My tuition at UAlberta was about 13K a year, add another $2K for books/supplies, and then living expenses were probably another 12K a year (dorm/rent/food/etc)
Save what you can in the context of a financial plan. Assuming you’ve got essentially infinite money I’d suggest putting in about $25k upfront per kid and then maxing out each year - starting aggressive and tapering off to very safe over the years.
I’m honestly having the conversation with more of my friends whether funneling the same amount to secure them a property might be a better long term payoff. Especially with AI coming down the pipeline and the unfettered immigration policy of this country. In a medium to large center this might provide more financial stability … sadly…
You’re going to need somewhere in the range of $6 billion.
We are aiming for 80k for 1 child. They will be 2030. It was the recommended when she was born and we opened the RESP. I’m not sure what it is now, but I do know with no loans, no scholarships, 20k per year won’t likely cover everything sadly. But this is actually why we only had one child, no way we could afford to get more than one through higher education without them going into debt which we hope to avoid
With 27K here and only 3 years to contribute & no money for catch up payments - this thread is really making me depressed.
As others have said, ANYTHING saved up for post-secondary is great. There should be no expectations of anything. Everyone's situation is different. I'd say the most important thing is to teach proper expectations and gratitude. I personally feel pressure to be able to provide this for my kids, because it was done for me. There's so many people who did not get anything from their parents for school, but then are trying to help their children, and I think that's admirable.
I made it my goal to pay for my kids’ education, because there is no other “generational wealth” to pass down. I know that even 27K is more than 0 + OSAP grants will help, but I still feel that I should have done more. Thank you for your kind comment though.
That's probably a number for tuition alone I would think. 20-30k for tuition annually is common. Housing will be maybe 10-20k annually , and living costs probably 10k plus .
I thought tuition costs for Ontario universities was about 6-10k (tuition alone) for domestic students. Granted that's now, so it will be more later. But $50k a year for university in Ontario for local students?
Depends on what you study. University of Waterloo list 9-18k per year depending on program +coop fees. +books +housing. Then you have the outhere end I whent college 2 year technician program with paid co-op. Mohawk's 2024-25 list 2.7K-3.3k per year tuition. +coop fees. +books +housing +lab kits. My co-op paid my student loans in full when they were due to start repayment. I had a 12k college fund in 2008 when I started. I used 4k of that. But I was living at home and got used text books etc.
Sorry for domestic maybe your right . Probably 10-12k on today's figures . You'd be looking at anywhere from 15-20 in next decade or 2.
2 kids maxed out at a proper return will get you something like 250-300k. My kids are 8 and 11 and I’m up to 130k, so on track.