Susan Daley

For the 2018/2019 school year, average tuition costs and additional compulsory fees for Canadian undergraduate students were $7,741. Ontario had the highest fees with an average of $9,771 for the school year. According to a Macleans piece, that only covers 34% of average school costs. The other $13,000 or so is eaten up by living expenses. That begs the question, will savings in an RESP be sufficient to cover education costs in Canada?

What happens to your RESP if your child doesn’t go to school? If you have an individual or family RESP, you can get your money out of the plan with relatively little pain. I outline the options to withdraw money from an RESP if the beneficiary of the RESP doesn’t attend post-secondary school.

In a recent blog we discussed how a fall in market prices today leads to an expectation of higher returns tomorrow. We explore this in more detail by considering the impact of the fall in portfolio values at the end of March and the revised expected returns on investors in different stage of their lives.

With stock markets down significantly across the globe as a result of the novel coronavirus in a matter of a month, it’s tempting to think stock markets are on sale and that you need to take advantage of that. Most don’t have large amounts of cash lying around, so borrowing to invest is one way to access that cash.

In the opening sentence to his book on Asset Management, published in 2014, Professor Andrew Ang said: “The two most important words in investing are bad times”

You’ll know how withdrawals from RESP’s technically work if you watched my last video, but you want to limit the amount of taxes and penalties when making withdrawals. That’s where today’s video comes into play.

In summary, you can pay student’s bills through two types of payments from an RESP. A withdrawal for post-secondary education (PSE) is a refund of the original contributions. There are no limits to the amounts that can be taken out of this bucket, and the amounts are tax free. Educational Assistance Payments (EAPs) come from the grant and accumulated earnings bucket within the RESP. There are certain limits to these payments to keep in mind, and the payments will be taxed in the student’s name.

Old Age Security, commonly referred to as OAS, provided a base level of retirement income to over 6 million Canadians in January 2019. I outline how OAS works and how to determine the amount you will be eligible for.

The foundation of many Canadians’ retirement is the Canada Pension Plan (CPP). The CPP is designed to replace a certain amount of your average work earnings, up to maximum limits each year. I outline what CPP is, how it works, and how much it might pay out.

How much of your current income will you need in retirement? The answer to this question is called the replacement ratio and is a major driver of the retirement planning piece. It will be different for everyone, so I outline how you can figure out your own replacement ratio that will ultimately determine how much you need to save for retirement.