Some avid readers may recall that back in early June we mentioned that we were asked to be a guest host for one of my favorite podcasts. Well the suspense is finally over as the podcast episodes are out. I know, I know, you haven’t been able to sleep at night…!
Back in early May I was approached by the lovely Chrissy from Eat Sleep Breath FI who is one of the co-hosts of the Explore FI Canada podcast to be a guest host with them. The topic? RESPs.
I was all for this as we have an RESP open for our 2 year old daughter and within hours I came up with an exhaustive list of questions to ask Kari from Money In Your Tea who was the episode guest and has 4 children, one who is in university and another who is starting later this year (sorry Kari for the bombardment of questions!).
I was planning to write a detailed post or two on RESPs in the future but these podcast episodes now serve the same purpose (and saves me a TON of time by not having to type everything up so slowly).
Curious about any of these questions?
- What is an RESP and who should have one? Who should not have one?
- Where can you open an RESP?
- What is the maximum contribution that the subscriber can contribute and what government grants are available?
- When did the RESP program start and how have the contribution limits and grants changed over the years?
- What is the maximum age you can contribute into an RESP? How old can a child be to remain eligible to withdraw from their RESP?
- How do you open up an RESP?
- Does your child have to go to school in Canada?
- What type of institutions qualify?
- What happens if your child decides not to go to post secondary school?
- What are the pros and cons of using individual vs. family accounts?
- How difficult is it to switch from an individual RESP for one child over to a family RESP once you have more than one?
- What has been your contribution strategy?
- What asset allocation do you use for your RESPs?
- Has your investment strategy been the same for all 4 children?
- Is there a cost to reallocate your assets within the RESP over the years if you transition from equities heavy in the beginning to fixed income heavy towards the end?
- What is the process of receiving grant money from the government?
- How are the withdrawals taxed?
- How does the timing of withdrawals impact taxes since the school year calendar differs from and the tax year calendar year?
- What are the two payment portions of an RESP – PSE and EAP?
- What is the withdrawal process like?
- What counts as a qualified expenses?
- Do you have to submit receipts to the government for these items? Do you need to prove it’s going towards the child somehow? Has it been a relatively easy process?
- Is there a withdrawal optimization strategy readily available for parents looking to withdrawal for their children’s education?
- Can you structure your withdrawals so the EAP gets withdrawn first and then the PSE so that if not all funds are used, the remainder can be with withdrawn tax free? How do you go about ensuring that order?
- Has the $5,000 limit on EAP within the first 13 weeks gotten in the way of your preferred withdrawal strategy?
Phew! Exhausted yet from just the questions alone? Curious to know the answers? If so, tune in to our two part interview with Kari where Chrissy, the Money Mechanic, and I tackle all these questions and more.
- Explore FI Canada: Episode 32: All About RESPs (Part 1) | Money in Your Tea and Modern FImily
- Explore FI Canada: Episode 33: All About RESPs (Part 2) | Money in Your Tea and Modern FImily
This was my first time getting to play host and I had a lot of fun! Thanks guys for having me on!
Like all our previous guest information, these podcast links can also be found on our Guest Appearance page.
I’d love to get some feedback from our FImily out there with any critiques or constructive criticism during my first hosting experience. So please, tune in and let me know how I can continue to grow and improve. I find that my mind wanders a lot when recording a podcast and it’s something I’m trying to work on. While it might seem like today’s post was short, after tuning in, you can see how much information we unpack in these two podcast episodes.
Any parents out there with RESPs for their kid(s)? Any new parents looking for more information on RESPs? Check out these podcasts as the goal was for it to become the go to spot for all information regarding Registered Education Savings Plans. After tuning in, we’d love to hear your feedback in the comments below! Did we miss anything on these podcast interviews?
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Aw, thanks for the shout-out, my friend! These two episodes are SUCH a great resource now. You’re totally right that it was easier to record all this info than it would have been to blog about it!
Thanks again for coming on to guest host with us, and for all the legwork you did preparing the questions and talking points for the episode. You really helped to make the show, lady!
Of course! I hope more and more families are able to become more informed about RESPs and also learn about the benefits of a DIY approach versus the insidious Group RESP Plans out there. Highway robbery!
There are so many confusing points when it comes to RESP. Unfortunately, many people don’t do any research and just go with these group RESPs.
BC and Saskatchewan also give out extra RESP grants so if you live in these provinces, make sure you look into that.
There really are! It hurts my soul seeing people sign up for the group RESP. They are trying to be proactive and do the best thing for their children but they are unaware of all the fees and costs associated with these group plans which ends up hurting their portfolio significantly.
That’s a good point too re BC and SK! Always do your research to see what perks are available to you based off location, income, etc.
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