Book Covers Everything You Wanted to Know About RESPs

Need RESP help?

After years of writing about Registered Education Savings Plans on his award-winning Money Smarts website, Mike Holman wrote the book you need to reference.


Just as the name suggests, The RESP Book, The Complete Guide to Registered Education Savings Plans for Canadians, covers all the bases and probably answers most of the questions you have about how the registered savings vehicle works.

The information from his site (on this particular subject, anyway), along with information from the Canada Revenue Agency, Human Resources and Skills Development Canada and Service Canada is all pulled together into one short, easily referenced book (118 pages, acknowledgments and index included).

Holman is refreshingly honest about what education could cost in the future, calling out some of the scary studies produced by some RESP providers that suggest children will need six figures saved up in order to attain their future educational goals.

He explains why RESPs are a good idea and how they work. He also explains how to apply for the different grants available, discusses the difference between individual and family plans and suggests how to handle situations where more than one family member would like to contribute. He also points out ownership issues – anyone setting up an RESP for your child owns the money (and can do with it as they please) until they decide to give it to your children for their educational needs. This needs to be considered seriously when thinking about larger financial and estate planning issues: The RESP owner could change his or her mind. Their circumstances might change. Or, if the RESP owner dies without noting the beneficiary in his or her will, the RESP might need to be collapsed.

In addition to discussing withdrawal rules, Holman takes it a step further as well, explaining how to withdraw the money in tax-efficient ways that could help the family save money. RESP funds will hopefully be taxed in the child's hands, at their lower marginal rate, when they go to school, but Holman also explains how to calculate the tax you'll owe if you collapse the fund because your child has instead decided to join the circus.

Holman says the book is written for those who are thinking about setting up an RESP account or who have RESP accounts set up already, but want to learn more. It is also written for those with kids who are getting close to their post-secondary years.

"The people who are heading into withdrawals, I think that's really where I the book gives a lot of value," he says, when it comes to "the strategies and the rules they need to know."

Related:
Are You Missing Out On Free Money For Your Kid's Education?
The Economics of Breastfeeding
New Babies and the RESP Salespeople


Kate McCaffery is a freelance writer in Toronto, Ontario. Visit mccaffery.ca/kate2.0/ for more information.