What do babblers think about RESPs? I want to be able to pay for my son's education when it comes time to do so, if we haven't managed to bring in free tuition by then. How much per month is a reasonable goal?

We did this through our financial advisor, who selected 2 non-volatile funds to work with.

Also, there is a way to set up the fund so that if the child decides to not go to university the money can be transferred with less of a tax hit. I don't remember the specifics of it, but it's something to try to find out.

I looked at the RESPs at the credit union and other places, and the one we liked was Canadian Scholarship Trust Plan. They seem to have a better rate of return, and are a non-profit organization.

We're trying to put away $2000 a year per kid. We've caught up with Ms T's year of birth, and have some distance to go with Ms B. It should cover an undergrad degree by the time she's old enough. I can't recommend a monthly amount, since we don't get regular paycheques. We're saving over the course of the year, and then putting down a lump sum. I don't know if we'll consistently reach our goal, but we're working on it.

Anyways when I did go to university in the late '80s it only covered about half the tuition each year at that time. Now that was before evil mike and before good bob. So I guess I could blame Sean Conway and Peterson.

The point is that I still had to work a part-time job and at times 2 to pay for books, rent, food etc.

But it is a good idea. When Mrs JPJ and I have kids we will start to invest in one for them as well

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Unfortunately, we worked out how much I could save in the next 12 years at the monthly contribution I could afford, and it didn't even work out to $10,000, including the interest. Rather disheartening to know that I won't be able to help him much even if I DO plan ahead. But at least it'll be something, I guess.

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That should make a good start anyway. When I went to school, all I had was the money I had saved from my summer jobs and some scholarships. It's unfortunate but most students are going to be in debt before they finish.

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Originally posted by Rufus Polson:
One thing to watch out for is the possibility your kid will want to do something relatively unconventional. Some of those outfits are very sticky about what kinds of education they'll pay out for. Sometimes there's even fine print about timing, so that if they don't go pretty much straight from high school to university you lose much of your money. My wife's ex had put money in RESPs for the kids, and a couple of them didn't get much out of it because they were doing stuff that wasn't on the approved list. So, pretty good idea in general, but watch carefully to see just who's in control of your money.

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Very good point. A girlfriend in University had an education scholarship from some company that her parents had paid into. There were very strict guidelines on how the money could be spent and there was a tight deadline on how long you could take to earn your degree.

Also, my understanding is that if your children don't go to school, you can transfer the RESP to your RRSP (providing you have the room), not your childrens'.

Finally, you are allowed to withdraw the amount you put into an RESP tax free at any time. If your children don't go to school, you need to repay the CESG (the government grants) and the income becomes taxable.

[ 16 February 2005: Message edited by: ReeferMadness ]

We set up funds for two, with Childrens Education funds inc. These have been an endless disappointment for the sake of brevity I'm not going to elaborate now.

My recommendation is that you set up a completely self directed RESP structured so you get the fed annual top up.

Use a trusted financial advisor or proven successful family member or associate to select two or three vehicles to put these funds into.

"What do babblers think about RESPs?"

Do everything to help your children.

Do not make the same mistake that I did,
thinking that the cost of education would
be looked after by someone else.

I lose sleep to this day thinking how I
could have provided better for my kids.

Unfortunately, I realize my mistake a little to late, as my kids are a little older.

With the onset of my own opportunity to parent we are very committed to putting away money for education. We've decided that any financial gifts will be put towards education and we've already begun to put monies aside.

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Originally posted by Hailey:
It's not like you'll have a pouty child if they don't get 100% coverage.

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I don't see any confusion in this thread, the 400 annual fed top up is available to any registered plan, third party or self directed, as long as the minimum sponser contribution is made.

It seemed to me from some comments relating to restrictions on areas of study allowed that some people were not making a distinction between self directed RESPs and the Children's Education fund that you referrenced.

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Very good point. A girlfriend in University had an education scholarship from some company that her parents had paid into. There were very strict guidelines on how the money could be spent and there was a tight deadline on how long you could take to earn your degree.

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and

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Really? From what I read on the CCRA website, you just have to be in an educational program that lasts 3 weeks.
Also, my understanding is that if your children don't go to school, you can transfer the RESP to your RRSP (providing you have the room), not your childrens'.

Finally, you are allowed to withdraw the amount you put into an RESP tax free at any time. If your children don't go to school, you need to repay the CESG (the government grants) and the income becomes taxable.

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In fact I was trying to back up your comments regarding your disappointment with these funds and elaborate on some of the problems with these plans.

"There is some confusion on this thread between the RESP program offered by the federal government with the 20% grant (up to $400) and the privately offered Education trust Funds. These funds use the federal grant and are stricter than the federal program in their criteria for payout"

Re RESP program offered by feds, it is my belief that fed doesn't offer the program, it sanctions the program that is either third party or self directed.

So to contrast fed program and private as you seem to be above is misleading because they are the same thing.

Anyway I reiterate to avoid the endless surprises and misunderstandings with bad RESP programs I recommend a self directed, even though you may miss out on a generous payout due to misfortune of others, you will not have to face the prevarcations of self interested program administrators.