Financially Speaking

Help secure your family’s future

As a parent, you have to be a terrific juggler. You juggle time to complete all the tasks and chores that fill your day. You juggle responsibilities to endure your children have the best possible childhood and prospects for their future. Yet the toughest juggling act of all is managing your finances while raising a family. It can even be more difficult to invest towards a comfortable financial future, including your retirement and the educational plans of your children.

If you’re a parent of young children, you are probably struggling with a tough decision: Is it better to first save for your retirement through Registered Retirement Savings Plans (RRSPs), or to save for your children’s education through Registered Education Savings Plans (RESP’s)?

Fret no more because there is a way to do both: Make your RRSP contribution before the deadline each year and use the resulting tax refund to make an RESP contribution.  That’s the ultimate “double-dip” because your child’s RESP can also take advantage of “free” cash from the federal government in the form of a Canada Education Savings Grant (CES Grant).*

Here’s why the ultimate “double-dip” works so well:

• When you make your maximum allowable RRSP contribution you may enjoy tax-savings that can be applied towards establishing or adding to your children’s RESPs.

• The federal government’s CES Grant program provides a matching grant for each RESP contribution made for an eligible child. The basic CES Grant is worth 20% on the first $2,500 of an annual RESP contribution or $500 per year. Even if you were unable to make enough of an RESP contribution to access the full Basic CES Grant money in previous years, you can start to make up for it now and in future years and get the Basic CES Grant money your child would have received in those earlier years.

• Families with children born after December 31st, 2003 who also receive the National Child Benefit Supplement may also qualify for additional funds through the Canada Learning Bond.*

Start Now

Finding the funds to make an annual RRSP contribution may seem difficult – especially, with all the daily juggling going on in your life. So why start now? Talk to your Investors Group Consultant about setting up a Pre-Authorized Contribution (PAC) to make monthly RRSP contributions. Your RRSP will begin to compound on a tax-deferred basis for a potentially fast and stronger growth over the long term. You can even arrange for your employer to reduce withholding taxes at source based on your RRSP contribution schedule, so that you can fund monthly RESP contributions instead of waiting for your tax refund in the spring to make an annual RESP contribution. It’s a win-win situation that will allow you to also capitalize on the ultimate “double-dip”.

Let us help you feel more confident about your future – plus make sure you take full advantage of all the tax-saving and income-building opportunities that are available to you.

*The Canada Educational Savings Grant and the Canada Learning Bond are sponsored by Human Resources and Social Development Canada. Ask your Consultant about provincial programs in your area.