TORONTO, ONTARIO — (Marketwire) — 09/19/12 — As part of BMO Financial Group-s ongoing commitment to financial literacy and -Making Money Make Sense- for Canadians, BMO is releasing a financial tip every week in 2012.
BMO-s Financial Tip of the Week: Opening a Registered Education Savings Plan (RESP) when children are young can help relieve financial pressure when they are ready to start university or college.
Today, a four-year university degree can cost upwards of $60,000. For a child born in 2012, the costs of a four-year university degree could reach $140,000.
“The costs associated with post-secondary education can be daunting,” said Robert Armstrong, Vice President, Managed Solutions and Registered Plans Strategy, BMO Investments Inc. “It-s critical to get a head start on saving by opening an RESP as soon as possible.”
BMO Investments Inc. offers the following tips for Canadians interested in opening an RESP:
Start early and make regular contributions: Start making regular contributions as early as you can. Contributing $500 per year to an RESP from the time a child is born could result in more than $20,000 saved by the time the child enters college or university.
Take advantage of government grants: Government grants and compounded return can add significantly to an RESP-s total savings. For example, the first $2,500 in RESP contributions per year receive a matching 20 per cent Canada Education Savings Grant from the federal government, which can be as much as $500 annually.
Mix it up: Cash and mutual funds are not the only ways to build up an RESP. Include a variety of investments such as guaranteed investment certificates (GICs), stocks, bonds and Exchange Traded Funds.
Speak with a financial professional: A financial professional can help you develop a financial plan that incorporates all of your short- and long-term goals, including saving for a child-s education. Together, you can determine the RESP contribution methods and strategies that are right for you.
Inspire alternative gift-giving: RESP contributions make great gifts for special occasions, so let friends and relatives (including grandparents) know that you are receptive to receiving them for your child-s future education. If two sets of grandparents each deposit $100 per year to their grandchild-s RESP, the RESP could be worth $11,000 by the time the grandchild turns 17.
To learn more about saving and RESPs, please visit: .
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Contacts:
Media Contacts:
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416-867-3996
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514-877-8224
Laurie Grant, Vancouver
(604) 665-7596