Learn How RESPs Can Give Children a Future of Possibilities

Harrison Brown, Portfolio Manager at Alitis Investment Counsel, frequently finds himself in conversations with local parents, sometimes in casual settings where children play nearby, blissfully unaware of the weighty discussions about their future. For many families, the central topic is securing funds for their children’s post-secondary education, an investment that grows in importance as educational costs continue to rise. 

In these conversations, Brown highlights a key financial tool that can make a significant impact on a child’s future: the Registered Education Savings Plan (RESP). Designed specifically to support education savings, RESPs offer an array of benefits, most notably the ability to boost contributions through government grants. “RESPs aren’t just about making education accessible,” Brown explains. “They’re also structured to maximize every dollar invested with grants that the government provides. For instance, for every $2,500 you contribute annually, the Canada Education Savings Grant (CESG) matches with an additional $500, up to a lifetime maximum of $7,200 per child.” This structure allows parents to grow their investment beyond what they could achieve through regular savings alone. 

Brown’s commitment to helping families secure their children’s futures is evident in his conversations. He understands that education is one of the most critical steps toward independence and career success, and he finds great fulfillment in equipping parents with tools to provide that path. “An RESP isn’t just about saving money; it’s about giving your child opportunities in life,” he notes. “This peace of mind, knowing they’ve invested in their child’s future, is a reward that many parents cherish.” 

Why the Timing of RESP Contributions Matters 

Timing, Brown explains, plays a crucial role in maximizing the benefits of an RESP. He strongly encourages parents to start contributing as early as possible. “Starting early allows compound growth to work its magic,” he emphasizes. “Even small, regular contributions made over a longer period can add up significantly.” Compounding means that the investment earnings also generate returns, resulting in exponential growth over time. The earlier the contributions start, the more opportunity there is for the investment to grow. 

However, for families who haven’t started early, Brown offers reassurance. It’s never too late to contribute to an RESP, he advises, as catch-up contributions can be made to recover missed government grants. Even a late start can result in substantial support for a child’s education costs, making this a flexible option for families at different stages of their savings journey. 

Flexibility in Changing Life Plans 

One common question parents have is, “What happens if my child decides not to pursue post-secondary education?” Brown understands this concern and addresses it openly with families. “It’s a valid worry, but the good news is that RESPs are versatile,” he explains. If a child doesn’t go on to college or university, the original contributions are returned to parents tax-free. While government grants are returned if the funds are not used for educational purposes, the investment growth within the RESP doesn’t have to go to waste. Parents can either transfer the earnings to an RRSP tax-deferred, or withdraw them with a minimal tax penalty, depending on their financial situation and objectives. 

The flexibility of the RESP helps alleviate the pressure of having to predict a child’s exact path years in advance. Brown assures parents that this flexibility means their savings are never “locked in” without options, giving them greater peace of mind in uncertain times. “Having options and not losing all the benefits of your investment if plans change is invaluable,” he says. 

The Benefits of Alitis’ Approach

For Brown, an essential part of his role at Alitis is helping parents navigate the nuances of investment plans like RESPs and providing guidance tailored to each family’s unique financial goals. Alitis Investment Counsel takes a comprehensive approach that considers the client’s complete financial picture, which is essential for long-term success. “We look at RESPs as a piece of a larger strategy. It’s not just a standalone account; it’s part of a family’s holistic financial plan,” Brown explains. 

Alitis’ approach considers not only maximizing government grants and contributions but also the impact on other family goals, such as retirement, home purchases, and unexpected financial needs. By integrating RESP contributions within a family’s larger financial framework, Alitis helps parents make informed choices that can positively impact both the short- and long-term health of their finances. The comprehensive support Alitis provides includes managing the RESP’s investment portfolio, balancing risk, and choosing the right mix of assets to match each family’s needs and timelines. 

Empowering Parents with Peace of Mind 

At the core of Brown’s conversations with parents is the assurance that they are setting their children up for success in an increasingly competitive and costly educational landscape. “Knowing you’ve taken steps to give your child an opportunity-filled future is priceless,” he says. The peace of mind that comes from knowing you’ve prepared for your child’s future, no matter what path they choose, is often the most rewarding aspect for parents. 

Investing in an RESP goes beyond merely funding education; it embodies a promise parents make to their children—a promise that they’ll be equipped with options and support when it’s time to carve out their own future. Brown finds purpose in helping families create this legacy, turning each dollar into an investment in possibilities. 

How to Start Your Family’s RESP Journey 

For families interested in opening an RESP, Brown recommends connecting with a professional financial advisor to discuss goals, timelines, and investment options. “The earlier you start, the more impact you can have, but it’s never too late to make a difference,” he notes.  

If you’re considering an RESP and want to learn more about how it fits within your family’s overall financial plan, contact Alitis Investment Counsel today. With an RESP, you’re not just saving; you’re investing in a brighter future for your child. 

Is the Alitis Approach right for you? Contact us today to learn more.