When starting an RESP, families have the choice of setting
up an individual plan or a family plan. For most families, a family RESP plan
may be your best bet.
A family RESP plan allows you to set up more than one child
in an RESP. You still list the children, and decide on the monthly contribution
the same way as an individual plan. The good thing with this is that if one
child decides they are not interested in post-secondary education, the cash and
grants are then allocated to the other child/children, and the money is not
lost. Some children may decide to go into trades, and forgo post-secondary, and
may not end up using their RESP or full RESP amount. With individual plans, if
the child decides to take another route and does not want to enroll in
post-secondary, that money is essentially lost. With family plans, you also end
up have fewer administration fees than if you were to set-up multiple
individual plans.
Grandparents can also set up family RESP plans. With a
family plan, they can set this up for their grandchildren, and if one
grandchild does not use it, the other ones can easily use the remaining money. You
do however, need to decide on the beneficiaries and how much to allocate to
each child.
When setting up the family plan, although you can contribute
to each child equally, when you have children of different ages, it may be wise
to contribute more towards the older children, so that when they are ready to
go to university, they have a nice nest waiting (with the younger children,
this can be built in time). With the money you put aside for them, and the 20%
of your contribution the government matches, there will be financial assistance
for your children available when they are ready to make the next journey in their
lives.
It’s always wise to assess your family situation, and make a
decision that suits the needs of your family situation.
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