It’s back to school for millions of Canadian students. And for those striving for a higher education, come higher costs. We look at RESPs, who’s eligible, how they work with Zeljka Turek, Investment Advisor, TD Wealth.
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Hello, and welcome to the show.
00:00:06.085 --> 00:00:06.710 align:middle line:90%
I'm Kim Parlee.
00:00:06.710 --> 00:00:08.340 align:middle line:90%
Thank you so much for joining us.
00:00:08.340 --> 00:00:12.740 align:middle line:84%
It is that time of the year when
parents are waving goodbye to their kids
00:00:12.740 --> 00:00:15.020 align:middle line:90%
as they head back to school.
00:00:15.020 --> 00:00:20.460 align:middle line:84%
Well, it may be all smiles and hugs now, but
fast forward a few years and those smiley
00:00:20.460 --> 00:00:23.080 align:middle line:84%
faces may be heading to
university or college.
00:00:23.080 --> 00:00:28.880 align:middle line:84%
And with a university degree costing
an average of $80,000 in Canada today,
00:00:28.880 --> 00:00:32.610 align:middle line:84%
you have to plan to save up quite a bit
for your children's higher education.
00:00:32.610 --> 00:00:35.670 align:middle line:84%
Advisor Zeljka Turek, Investment
Advisor with TD Wealth
00:00:35.670 --> 00:00:38.854 align:middle line:84%
joins us from Vancouver
on some primers on how
00:00:38.854 --> 00:00:41.270 align:middle line:84%
to save for our kids' education,
the things we need to do.
00:00:41.270 --> 00:00:43.020 align:middle line:90%
Zeljka, great to see you.
00:00:43.020 --> 00:00:44.340 align:middle line:90%
Great to see you, too, Kim.
00:00:44.340 --> 00:00:45.729 align:middle line:90%
Thank you for having me.
00:00:45.729 --> 00:00:47.020 align:middle line:90%
A pleasure to have you with us.
00:00:47.020 --> 00:00:52.730 align:middle line:84%
Let's start with just-- I mentioned a degree
costing about $80,000 now, but fast forward
00:00:52.730 --> 00:00:53.290 align:middle line:90%
a few years.
00:00:53.290 --> 00:00:56.770 align:middle line:84%
How much do parents need to save, do
you think, for their kid's education?
00:00:56.770 --> 00:01:03.915 align:middle line:84%
Oh, you can look at least $125,000 or
more when you reach about 2020 or 2030.
00:01:03.915 --> 00:01:06.180 align:middle line:90%
It could be quite costly.
00:01:06.180 --> 00:01:07.120 align:middle line:90%
Yeah, no kidding.
00:01:07.120 --> 00:01:10.070 align:middle line:84%
That is a lot of money,
and that's for one child.
00:01:10.070 --> 00:01:11.160 align:middle line:90%
That's the one child.
00:01:11.160 --> 00:01:12.230 align:middle line:90%
That's on average.
00:01:12.230 --> 00:01:15.350 align:middle line:84%
Again, it will depend where
they're going, what their needs
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with what degree, the school, and so on.
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Could be more or less.
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But it's still a big chunk of change.
00:01:22.710 --> 00:01:23.240 align:middle line:90%
Hmm.
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Let me ask you just in terms of
your clients that you work with,
00:01:26.180 --> 00:01:29.630 align:middle line:84%
and just from what you've done from
your years in the investment industry.
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How good are people at saving
for their kids' education?
00:01:33.680 --> 00:01:35.120 align:middle line:90%
Not as good as they should be.
00:01:35.120 --> 00:01:39.080 align:middle line:84%
I'd say about half the
parents really commit to it.
00:01:39.080 --> 00:01:42.240 align:middle line:90%
Others mean well or they start too late.
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The best thing to do is start early.
00:01:44.950 --> 00:01:50.470 align:middle line:84%
You want to start as early as possible,
get that kind of savings going,
00:01:50.470 --> 00:01:57.720 align:middle line:84%
and before you know it, you have a
nice RESP collected for your child.
00:01:57.720 --> 00:02:00.150 align:middle line:84%
But a lot of them either
tend to forget, or they
00:02:00.150 --> 00:02:05.100 align:middle line:84%
find other things to pay, like bills
and retirement funding and so on.
00:02:05.100 --> 00:02:07.720 align:middle line:90%
So RESP seems to be on the back burner.
00:02:07.720 --> 00:02:10.860 align:middle line:84%
Yeah, those pesky bills do
get in the way sometimes.
00:02:10.860 --> 00:02:12.520 align:middle line:90%
Yes.
00:02:12.520 --> 00:02:14.940 align:middle line:84%
Let me ask you about just
the mechanics of an RESP,
00:02:14.940 --> 00:02:16.720 align:middle line:90%
just as a bit of a primer for everyone.
00:02:16.720 --> 00:02:20.840 align:middle line:84%
And I think a lot of people know
this, but the government grant
00:02:20.840 --> 00:02:23.030 align:middle line:84%
is what makes this so
compelling for so many people.
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There's no other way to
say it, it's free money.
00:02:25.030 --> 00:02:25.738 align:middle line:90%
How does it work?
00:02:25.738 --> 00:02:26.510 align:middle line:90%
Absolutely.
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Well, the way it works is, like you
mentioned, it's a government grant.
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You want to take advantage of it.
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It's the only registered program out there
that you get free money from the government.
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The way it works, you get 20% up to
the first $2,500 that you contribute.
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And the government is willing to give up to
$7,200 per child per the span of the RESP.
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So it's a great tool to start saving, and
enjoy that free money from the government.
00:02:54.800 --> 00:02:57.250 align:middle line:90%
Now there is a lifetime limit, is there not?
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Is it $50,000?
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$50,000 is your contribution
limit, so you as a contributor
00:03:03.150 --> 00:03:08.701 align:middle line:84%
can contribute up to 50,000 per child,
but the government grant limit is 7,200.
00:03:08.701 --> 00:03:09.700 align:middle line:90%
So you combine the two--
00:03:09.700 --> 00:03:10.199 align:middle line:90%
Got it.
00:03:10.199 --> 00:03:13.020 align:middle line:84%
--you can see it's a pretty
good amount of money.
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I wonder, and I guess this very
much depends on the markets,
00:03:16.100 --> 00:03:18.606 align:middle line:84%
but I remember speaking with
someone years ago who said
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you could-- if you have the money,
and you're in the situation,
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you could put it in all at once, the 50,000.
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And then you're going to get that compounding
over the years, or you could do it over time
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and take advantage of the government money.
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I guess the mechanics of
which one's better is going
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to depend on what the markets are doing.
00:03:32.980 --> 00:03:34.400 align:middle line:90%
Absolutely.
00:03:34.400 --> 00:03:37.620 align:middle line:84%
You know, looking at how you're
investing it, because what you put it
00:03:37.620 --> 00:03:40.940 align:middle line:84%
in-- you can invest it as
conservatively as you want,
00:03:40.940 --> 00:03:43.480 align:middle line:90%
or as an aggressive portfolio as you want.
00:03:43.480 --> 00:03:47.180 align:middle line:84%
It is long term, so you know
you're leaving the money to grow.
00:03:47.180 --> 00:03:51.190 align:middle line:84%
I would suggest, do something
balanced that you're comfortable with.
00:03:51.190 --> 00:03:57.140 align:middle line:84%
But again, depending how you invest
it, the compounding will occur.
00:03:57.140 --> 00:04:03.670 align:middle line:84%
Let me ask you about the difficulties
maybe of separating that out for many kids.
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I imagine, that's $50,000 lifetime
contribution limit for one child.
00:04:07.836 --> 00:04:08.960 align:middle line:90%
You've got, let's say, one.
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You've got two kids.
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And let's say you decide
to have a family RESP.
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You can decide how much
to allocate to each child.
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You can put different money
into each kid's RESP, but how do
00:04:21.040 --> 00:04:23.730 align:middle line:90%
you decide which kid gets the most money?
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I mean, this could be
internal family politics.
00:04:26.430 --> 00:04:29.100 align:middle line:90%
But any advice around that?
00:04:29.100 --> 00:04:30.790 align:middle line:90%
Well, that's a very good question.
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I mean, I have clients that have multiple
children, and they put it in a family plan.
00:04:36.270 --> 00:04:38.350 align:middle line:84%
And the way they look at
it has never really been
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an issue is kind of first come first serve.
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That the first child that's going to
graduate and go on to further schooling,
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they'll get the funds first, and
depending what they need it for.
00:04:51.210 --> 00:04:54.865 align:middle line:84%
They're looking at it as
a full education plan,
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and they'll allocate it however
financially they see it fit.
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So if one child goes to do a medical degree
while the other one is maybe a trade school,
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they're both going to get their
education and pursuing their dreams,
00:05:08.570 --> 00:05:10.710 align:middle line:90%
but one will cost more than the other.
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And you have that flexibility
within the family plan.
00:05:13.575 --> 00:05:16.700 align:middle line:84%
Let me ask you, what if you have some
kids who decide-- they hit that time.
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They're like, I don't want to go to school.
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I'm not going to go to
a college or university.
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What happens to the money that you've
accumulated for them for education?
00:05:28.551 --> 00:05:29.050 align:middle line:90%
Yes.
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Well, because this is an
education savings plan,
00:05:32.350 --> 00:05:34.730 align:middle line:84%
that government grant I was
telling you about earlier,
00:05:34.730 --> 00:05:37.700 align:middle line:84%
you'd have to pay back the
government because you're not
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using it for educational purposes.
00:05:40.830 --> 00:05:44.540 align:middle line:84%
However, the balance of it, what
you contributed into the plan,
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you can roll it over into your own RSP,
for instance, if you have the room.
00:05:50.280 --> 00:05:54.470 align:middle line:84%
Or if it's in a family plan,
allocate it to the other child
00:05:54.470 --> 00:05:57.840 align:middle line:90%
that might be needing it in the future.
00:05:57.840 --> 00:06:00.032 align:middle line:90%
So you have some flexibility there.
00:06:00.032 --> 00:06:01.490 align:middle line:90%
Yeah, you do have some flexibility.
00:06:01.490 --> 00:06:05.160 align:middle line:84%
What about flexibility in finding
money to put into the RESP?
00:06:05.160 --> 00:06:07.680 align:middle line:84%
I mean, you mentioned
earlier, you have bills.
00:06:07.680 --> 00:06:09.470 align:middle line:90%
You're saving for your own retirement.
00:06:09.470 --> 00:06:15.050 align:middle line:84%
Any advice or any thoughts of where people
can get the money to put into their RESP?
00:06:15.050 --> 00:06:18.590 align:middle line:84%
It's always far hard to
find that last little bit.
00:06:18.590 --> 00:06:24.200 align:middle line:84%
But for example, just the universal child
care benefit that everyone is receiving now,
00:06:24.200 --> 00:06:26.790 align:middle line:84%
or most people are receiving
now, that's a great way
00:06:26.790 --> 00:06:32.170 align:middle line:84%
to use some government money to pay some
other government money to get the grant.
00:06:32.170 --> 00:06:35.910 align:middle line:84%
So use that credit that you're
receiving for your child.
00:06:35.910 --> 00:06:37.770 align:middle line:90%
Create some kind of savings plan.
00:06:37.770 --> 00:06:43.190 align:middle line:84%
I mean, what I did with my daughter
is-- we kind of did it together.
00:06:43.190 --> 00:06:49.030 align:middle line:84%
So I said, mom will put away $50 a week, and
part of your allowance and your piggy bank,
00:06:49.030 --> 00:06:50.700 align:middle line:90%
let's put that in there as well.
00:06:50.700 --> 00:06:54.370 align:middle line:84%
Or any birthday money or
sometimes Christmas money
00:06:54.370 --> 00:06:58.240 align:middle line:84%
from grandparents, instead of
getting that expensive toy,
00:06:58.240 --> 00:07:01.400 align:middle line:84%
maybe partially to go to
the education savings plan.
00:07:01.400 --> 00:07:03.960 align:middle line:84%
And that way the kids have
skin in the game, and they
00:07:03.960 --> 00:07:07.770 align:middle line:90%
feel a little more part of the process.
00:07:07.770 --> 00:07:10.980 align:middle line:84%
But you know allowances, part
time jobs, things like that.
00:07:10.980 --> 00:07:12.722 align:middle line:90%
That's fantastic advice.
00:07:12.722 --> 00:07:14.930 align:middle line:84%
I think you just won mom of
the year for that advice.
00:07:14.930 --> 00:07:17.554 align:middle line:84%
I think a lot of parents are
saying, you can convince your kids
00:07:17.554 --> 00:07:21.545 align:middle line:84%
to put in their Christmas or
Hanukkah money into an RESP?
00:07:21.545 --> 00:07:23.704 align:middle line:90%
That takes something.
00:07:23.704 --> 00:07:24.870 align:middle line:90%
Well, it does, and trust me.
00:07:24.870 --> 00:07:27.380 align:middle line:84%
Maybe you might need to
do some negotiating there.
00:07:27.380 --> 00:07:30.230 align:middle line:84%
I'm not saying all of it, but
you get them put in a little bit,
00:07:30.230 --> 00:07:31.990 align:middle line:90%
it makes them feel part of the process.
00:07:31.990 --> 00:07:34.720 align:middle line:90%
And it is for their future anyway.
00:07:34.720 --> 00:07:36.705 align:middle line:90%
Zeljka, let me ask you this last question.
00:07:36.705 --> 00:07:39.330 align:middle line:84%
What do you think if people would
see this conversation, what's
00:07:39.330 --> 00:07:44.820 align:middle line:84%
the one thing you really want them to
take from our conversation about RESPs?
00:07:44.820 --> 00:07:46.500 align:middle line:90%
Main thing, start early.
00:07:46.500 --> 00:07:48.860 align:middle line:84%
The earlier you start,
the more you can benefit,
00:07:48.860 --> 00:07:54.730 align:middle line:84%
a, from the grants, the tax
free growth, that savings plan,
00:07:54.730 --> 00:07:57.850 align:middle line:90%
getting the child to contribute if you can.
00:07:57.850 --> 00:08:00.570 align:middle line:90%
But early as possible would be best.
00:08:00.570 --> 00:08:03.510 align:middle line:84%
It's a great way, a great savings
for your child in the future.
00:08:03.510 --> 00:08:04.510 align:middle line:90%
Great advice.
00:08:04.510 --> 00:08:06.737 align:middle line:90%
Zeljka, thanks so much for joining us.
00:08:06.737 --> 00:08:07.570 align:middle line:90%
You're very welcome.
00:08:07.570 --> 00:08:09.130 align:middle line:90%
Thank you for having me.
00:08:09.130 --> 00:08:14.210 align:middle line:84%
Zeljka Turek, Investment Advisor with TD
Wealth, and she joined us from Vancouver.
00:00:06.085 --> 00:00:06.710 align:middle line:90%
I'm Kim Parlee.
00:00:06.710 --> 00:00:08.340 align:middle line:90%
Thank you so much for joining us.
00:00:08.340 --> 00:00:12.740 align:middle line:84%
It is that time of the year when
parents are waving goodbye to their kids
00:00:12.740 --> 00:00:15.020 align:middle line:90%
as they head back to school.
00:00:15.020 --> 00:00:20.460 align:middle line:84%
Well, it may be all smiles and hugs now, but
fast forward a few years and those smiley
00:00:20.460 --> 00:00:23.080 align:middle line:84%
faces may be heading to
university or college.
00:00:23.080 --> 00:00:28.880 align:middle line:84%
And with a university degree costing
an average of $80,000 in Canada today,
00:00:28.880 --> 00:00:32.610 align:middle line:84%
you have to plan to save up quite a bit
for your children's higher education.
00:00:32.610 --> 00:00:35.670 align:middle line:84%
Advisor Zeljka Turek, Investment
Advisor with TD Wealth
00:00:35.670 --> 00:00:38.854 align:middle line:84%
joins us from Vancouver
on some primers on how
00:00:38.854 --> 00:00:41.270 align:middle line:84%
to save for our kids' education,
the things we need to do.
00:00:41.270 --> 00:00:43.020 align:middle line:90%
Zeljka, great to see you.
00:00:43.020 --> 00:00:44.340 align:middle line:90%
Great to see you, too, Kim.
00:00:44.340 --> 00:00:45.729 align:middle line:90%
Thank you for having me.
00:00:45.729 --> 00:00:47.020 align:middle line:90%
A pleasure to have you with us.
00:00:47.020 --> 00:00:52.730 align:middle line:84%
Let's start with just-- I mentioned a degree
costing about $80,000 now, but fast forward
00:00:52.730 --> 00:00:53.290 align:middle line:90%
a few years.
00:00:53.290 --> 00:00:56.770 align:middle line:84%
How much do parents need to save, do
you think, for their kid's education?
00:00:56.770 --> 00:01:03.915 align:middle line:84%
Oh, you can look at least $125,000 or
more when you reach about 2020 or 2030.
00:01:03.915 --> 00:01:06.180 align:middle line:90%
It could be quite costly.
00:01:06.180 --> 00:01:07.120 align:middle line:90%
Yeah, no kidding.
00:01:07.120 --> 00:01:10.070 align:middle line:84%
That is a lot of money,
and that's for one child.
00:01:10.070 --> 00:01:11.160 align:middle line:90%
That's the one child.
00:01:11.160 --> 00:01:12.230 align:middle line:90%
That's on average.
00:01:12.230 --> 00:01:15.350 align:middle line:84%
Again, it will depend where
they're going, what their needs
00:01:15.350 --> 00:01:18.920 align:middle line:90%
with what degree, the school, and so on.
00:01:18.920 --> 00:01:20.270 align:middle line:90%
Could be more or less.
00:01:20.270 --> 00:01:22.710 align:middle line:90%
But it's still a big chunk of change.
00:01:22.710 --> 00:01:23.240 align:middle line:90%
Hmm.
00:01:23.240 --> 00:01:26.180 align:middle line:84%
Let me ask you just in terms of
your clients that you work with,
00:01:26.180 --> 00:01:29.630 align:middle line:84%
and just from what you've done from
your years in the investment industry.
00:01:29.630 --> 00:01:33.680 align:middle line:84%
How good are people at saving
for their kids' education?
00:01:33.680 --> 00:01:35.120 align:middle line:90%
Not as good as they should be.
00:01:35.120 --> 00:01:39.080 align:middle line:84%
I'd say about half the
parents really commit to it.
00:01:39.080 --> 00:01:42.240 align:middle line:90%
Others mean well or they start too late.
00:01:42.240 --> 00:01:44.950 align:middle line:90%
The best thing to do is start early.
00:01:44.950 --> 00:01:50.470 align:middle line:84%
You want to start as early as possible,
get that kind of savings going,
00:01:50.470 --> 00:01:57.720 align:middle line:84%
and before you know it, you have a
nice RESP collected for your child.
00:01:57.720 --> 00:02:00.150 align:middle line:84%
But a lot of them either
tend to forget, or they
00:02:00.150 --> 00:02:05.100 align:middle line:84%
find other things to pay, like bills
and retirement funding and so on.
00:02:05.100 --> 00:02:07.720 align:middle line:90%
So RESP seems to be on the back burner.
00:02:07.720 --> 00:02:10.860 align:middle line:84%
Yeah, those pesky bills do
get in the way sometimes.
00:02:10.860 --> 00:02:12.520 align:middle line:90%
Yes.
00:02:12.520 --> 00:02:14.940 align:middle line:84%
Let me ask you about just
the mechanics of an RESP,
00:02:14.940 --> 00:02:16.720 align:middle line:90%
just as a bit of a primer for everyone.
00:02:16.720 --> 00:02:20.840 align:middle line:84%
And I think a lot of people know
this, but the government grant
00:02:20.840 --> 00:02:23.030 align:middle line:84%
is what makes this so
compelling for so many people.
00:02:23.030 --> 00:02:25.030 align:middle line:84%
There's no other way to
say it, it's free money.
00:02:25.030 --> 00:02:25.738 align:middle line:90%
How does it work?
00:02:25.738 --> 00:02:26.510 align:middle line:90%
Absolutely.
00:02:26.510 --> 00:02:29.865 align:middle line:84%
Well, the way it works is, like you
mentioned, it's a government grant.
00:02:29.865 --> 00:02:31.240 align:middle line:90%
You want to take advantage of it.
00:02:31.240 --> 00:02:35.450 align:middle line:84%
It's the only registered program out there
that you get free money from the government.
00:02:35.450 --> 00:02:40.870 align:middle line:84%
The way it works, you get 20% up to
the first $2,500 that you contribute.
00:02:40.870 --> 00:02:47.585 align:middle line:84%
And the government is willing to give up to
$7,200 per child per the span of the RESP.
00:02:47.585 --> 00:02:54.800 align:middle line:84%
So it's a great tool to start saving, and
enjoy that free money from the government.
00:02:54.800 --> 00:02:57.250 align:middle line:90%
Now there is a lifetime limit, is there not?
00:02:57.250 --> 00:02:58.846 align:middle line:90%
Is it $50,000?
00:02:58.846 --> 00:03:03.150 align:middle line:84%
$50,000 is your contribution
limit, so you as a contributor
00:03:03.150 --> 00:03:08.701 align:middle line:84%
can contribute up to 50,000 per child,
but the government grant limit is 7,200.
00:03:08.701 --> 00:03:09.700 align:middle line:90%
So you combine the two--
00:03:09.700 --> 00:03:10.199 align:middle line:90%
Got it.
00:03:10.199 --> 00:03:13.020 align:middle line:84%
--you can see it's a pretty
good amount of money.
00:03:13.020 --> 00:03:16.100 align:middle line:84%
I wonder, and I guess this very
much depends on the markets,
00:03:16.100 --> 00:03:18.606 align:middle line:84%
but I remember speaking with
someone years ago who said
00:03:18.606 --> 00:03:21.230 align:middle line:84%
you could-- if you have the money,
and you're in the situation,
00:03:21.230 --> 00:03:23.210 align:middle line:90%
you could put it in all at once, the 50,000.
00:03:23.210 --> 00:03:26.960 align:middle line:84%
And then you're going to get that compounding
over the years, or you could do it over time
00:03:26.960 --> 00:03:28.580 align:middle line:90%
and take advantage of the government money.
00:03:28.580 --> 00:03:30.746 align:middle line:84%
I guess the mechanics of
which one's better is going
00:03:30.746 --> 00:03:32.980 align:middle line:90%
to depend on what the markets are doing.
00:03:32.980 --> 00:03:34.400 align:middle line:90%
Absolutely.
00:03:34.400 --> 00:03:37.620 align:middle line:84%
You know, looking at how you're
investing it, because what you put it
00:03:37.620 --> 00:03:40.940 align:middle line:84%
in-- you can invest it as
conservatively as you want,
00:03:40.940 --> 00:03:43.480 align:middle line:90%
or as an aggressive portfolio as you want.
00:03:43.480 --> 00:03:47.180 align:middle line:84%
It is long term, so you know
you're leaving the money to grow.
00:03:47.180 --> 00:03:51.190 align:middle line:84%
I would suggest, do something
balanced that you're comfortable with.
00:03:51.190 --> 00:03:57.140 align:middle line:84%
But again, depending how you invest
it, the compounding will occur.
00:03:57.140 --> 00:04:03.670 align:middle line:84%
Let me ask you about the difficulties
maybe of separating that out for many kids.
00:04:03.670 --> 00:04:07.836 align:middle line:84%
I imagine, that's $50,000 lifetime
contribution limit for one child.
00:04:07.836 --> 00:04:08.960 align:middle line:90%
You've got, let's say, one.
00:04:08.960 --> 00:04:10.340 align:middle line:90%
You've got two kids.
00:04:10.340 --> 00:04:15.190 align:middle line:84%
And let's say you decide
to have a family RESP.
00:04:15.190 --> 00:04:17.779 align:middle line:84%
You can decide how much
to allocate to each child.
00:04:17.779 --> 00:04:21.040 align:middle line:84%
You can put different money
into each kid's RESP, but how do
00:04:21.040 --> 00:04:23.730 align:middle line:90%
you decide which kid gets the most money?
00:04:23.730 --> 00:04:26.430 align:middle line:84%
I mean, this could be
internal family politics.
00:04:26.430 --> 00:04:29.100 align:middle line:90%
But any advice around that?
00:04:29.100 --> 00:04:30.790 align:middle line:90%
Well, that's a very good question.
00:04:30.790 --> 00:04:36.270 align:middle line:84%
I mean, I have clients that have multiple
children, and they put it in a family plan.
00:04:36.270 --> 00:04:38.350 align:middle line:84%
And the way they look at
it has never really been
00:04:38.350 --> 00:04:41.210 align:middle line:90%
an issue is kind of first come first serve.
00:04:41.210 --> 00:04:47.380 align:middle line:84%
That the first child that's going to
graduate and go on to further schooling,
00:04:47.380 --> 00:04:51.210 align:middle line:84%
they'll get the funds first, and
depending what they need it for.
00:04:51.210 --> 00:04:54.865 align:middle line:84%
They're looking at it as
a full education plan,
00:04:54.865 --> 00:04:59.810 align:middle line:84%
and they'll allocate it however
financially they see it fit.
00:04:59.810 --> 00:05:05.610 align:middle line:84%
So if one child goes to do a medical degree
while the other one is maybe a trade school,
00:05:05.610 --> 00:05:08.570 align:middle line:84%
they're both going to get their
education and pursuing their dreams,
00:05:08.570 --> 00:05:10.710 align:middle line:90%
but one will cost more than the other.
00:05:10.710 --> 00:05:13.575 align:middle line:84%
And you have that flexibility
within the family plan.
00:05:13.575 --> 00:05:16.700 align:middle line:84%
Let me ask you, what if you have some
kids who decide-- they hit that time.
00:05:16.700 --> 00:05:18.491 align:middle line:90%
They're like, I don't want to go to school.
00:05:18.491 --> 00:05:22.440 align:middle line:84%
I'm not going to go to
a college or university.
00:05:22.440 --> 00:05:28.551 align:middle line:84%
What happens to the money that you've
accumulated for them for education?
00:05:28.551 --> 00:05:29.050 align:middle line:90%
Yes.
00:05:29.050 --> 00:05:32.350 align:middle line:84%
Well, because this is an
education savings plan,
00:05:32.350 --> 00:05:34.730 align:middle line:84%
that government grant I was
telling you about earlier,
00:05:34.730 --> 00:05:37.700 align:middle line:84%
you'd have to pay back the
government because you're not
00:05:37.700 --> 00:05:40.830 align:middle line:90%
using it for educational purposes.
00:05:40.830 --> 00:05:44.540 align:middle line:84%
However, the balance of it, what
you contributed into the plan,
00:05:44.540 --> 00:05:50.280 align:middle line:84%
you can roll it over into your own RSP,
for instance, if you have the room.
00:05:50.280 --> 00:05:54.470 align:middle line:84%
Or if it's in a family plan,
allocate it to the other child
00:05:54.470 --> 00:05:57.840 align:middle line:90%
that might be needing it in the future.
00:05:57.840 --> 00:06:00.032 align:middle line:90%
So you have some flexibility there.
00:06:00.032 --> 00:06:01.490 align:middle line:90%
Yeah, you do have some flexibility.
00:06:01.490 --> 00:06:05.160 align:middle line:84%
What about flexibility in finding
money to put into the RESP?
00:06:05.160 --> 00:06:07.680 align:middle line:84%
I mean, you mentioned
earlier, you have bills.
00:06:07.680 --> 00:06:09.470 align:middle line:90%
You're saving for your own retirement.
00:06:09.470 --> 00:06:15.050 align:middle line:84%
Any advice or any thoughts of where people
can get the money to put into their RESP?
00:06:15.050 --> 00:06:18.590 align:middle line:84%
It's always far hard to
find that last little bit.
00:06:18.590 --> 00:06:24.200 align:middle line:84%
But for example, just the universal child
care benefit that everyone is receiving now,
00:06:24.200 --> 00:06:26.790 align:middle line:84%
or most people are receiving
now, that's a great way
00:06:26.790 --> 00:06:32.170 align:middle line:84%
to use some government money to pay some
other government money to get the grant.
00:06:32.170 --> 00:06:35.910 align:middle line:84%
So use that credit that you're
receiving for your child.
00:06:35.910 --> 00:06:37.770 align:middle line:90%
Create some kind of savings plan.
00:06:37.770 --> 00:06:43.190 align:middle line:84%
I mean, what I did with my daughter
is-- we kind of did it together.
00:06:43.190 --> 00:06:49.030 align:middle line:84%
So I said, mom will put away $50 a week, and
part of your allowance and your piggy bank,
00:06:49.030 --> 00:06:50.700 align:middle line:90%
let's put that in there as well.
00:06:50.700 --> 00:06:54.370 align:middle line:84%
Or any birthday money or
sometimes Christmas money
00:06:54.370 --> 00:06:58.240 align:middle line:84%
from grandparents, instead of
getting that expensive toy,
00:06:58.240 --> 00:07:01.400 align:middle line:84%
maybe partially to go to
the education savings plan.
00:07:01.400 --> 00:07:03.960 align:middle line:84%
And that way the kids have
skin in the game, and they
00:07:03.960 --> 00:07:07.770 align:middle line:90%
feel a little more part of the process.
00:07:07.770 --> 00:07:10.980 align:middle line:84%
But you know allowances, part
time jobs, things like that.
00:07:10.980 --> 00:07:12.722 align:middle line:90%
That's fantastic advice.
00:07:12.722 --> 00:07:14.930 align:middle line:84%
I think you just won mom of
the year for that advice.
00:07:14.930 --> 00:07:17.554 align:middle line:84%
I think a lot of parents are
saying, you can convince your kids
00:07:17.554 --> 00:07:21.545 align:middle line:84%
to put in their Christmas or
Hanukkah money into an RESP?
00:07:21.545 --> 00:07:23.704 align:middle line:90%
That takes something.
00:07:23.704 --> 00:07:24.870 align:middle line:90%
Well, it does, and trust me.
00:07:24.870 --> 00:07:27.380 align:middle line:84%
Maybe you might need to
do some negotiating there.
00:07:27.380 --> 00:07:30.230 align:middle line:84%
I'm not saying all of it, but
you get them put in a little bit,
00:07:30.230 --> 00:07:31.990 align:middle line:90%
it makes them feel part of the process.
00:07:31.990 --> 00:07:34.720 align:middle line:90%
And it is for their future anyway.
00:07:34.720 --> 00:07:36.705 align:middle line:90%
Zeljka, let me ask you this last question.
00:07:36.705 --> 00:07:39.330 align:middle line:84%
What do you think if people would
see this conversation, what's
00:07:39.330 --> 00:07:44.820 align:middle line:84%
the one thing you really want them to
take from our conversation about RESPs?
00:07:44.820 --> 00:07:46.500 align:middle line:90%
Main thing, start early.
00:07:46.500 --> 00:07:48.860 align:middle line:84%
The earlier you start,
the more you can benefit,
00:07:48.860 --> 00:07:54.730 align:middle line:84%
a, from the grants, the tax
free growth, that savings plan,
00:07:54.730 --> 00:07:57.850 align:middle line:90%
getting the child to contribute if you can.
00:07:57.850 --> 00:08:00.570 align:middle line:90%
But early as possible would be best.
00:08:00.570 --> 00:08:03.510 align:middle line:84%
It's a great way, a great savings
for your child in the future.
00:08:03.510 --> 00:08:04.510 align:middle line:90%
Great advice.
00:08:04.510 --> 00:08:06.737 align:middle line:90%
Zeljka, thanks so much for joining us.
00:08:06.737 --> 00:08:07.570 align:middle line:90%
You're very welcome.
00:08:07.570 --> 00:08:09.130 align:middle line:90%
Thank you for having me.
00:08:09.130 --> 00:08:14.210 align:middle line:84%
Zeljka Turek, Investment Advisor with TD
Wealth, and she joined us from Vancouver.
