"As long as the world shall last there will be wrongs, and if no man objected
and no man rebelled, those wrongs would last forever
~Clarence Darrow

Tuesday, August 5, 2008

Are You Missing The Boat Too?

I came across an interesting article in today's Chronicle Herald concerning how many parents in Nova Scotia don't make use of RESPs (Registered Education Savings Plans). Around 68.2 per cent, apparently.

That would be 68.2 per cent of Nova Scotia parents who not only lose out on a tax-free vehicle for saving money for their children's education but also potentially lose out on the Canada Education Savings Grant and Canada Learning Bond.

The savings grant could add as much as $9,200 from the federal government over the life of the plan.
"Effectively, you get $20 for every $100 you put into your savings program," Mr. Lewis said.

The federal government began offering the savings grant in 1998, "as an incentive to encourage more families to save," he said, while the Canada Learning Bond was introduced in 2005 as a supplement for families whose annual incomes fall below about $37,000.

"The government looked at the program and (decided) . . . that there’s value in engaging families in planning for a higher education, regardless of what your income is, from the time your kids are young," Mr. Lewis said.

The learning bond isn’t a matching grant, he said, but provides parents with $500 to start an RESP in the year their child is born, with $100 added each year until the bond tops out at $2,000. Children who are eligible for both grants could receive $9,200 from the federal government for their RESP.
Which got me to thinking about what percentage of Nova Scotia families with a disabled child might be losing out, too. Dollars to donuts (or perhaps books and meal plans, to say nothing of the cost of tuition), the disability community is highly over-represented in that 62.2 per cent. I fear too many of us are likely still caught in that "it's not for our child(ren)" mindset that intuitively tells us that a RESP would be a waste of money for a child with a disability.

But as we've discussed before, that's far from necessarily so. As it turns out, we purchased RESPs for both our children long before we were aware of their disabilities. But given the government grants (read free money added to the fund by the government), the guarantee that at least some, if not all, of our capital will be returned if our children do not go on to post-secondary education and the fact that most, if not all, of such funds are also transferable to another eligible child, I'm not too concerned.

And when I consider the advances that are being made in making post-secondary education more accessible to our children, be they challenged physically or mentally, I am actually quite hopeful that our daughters will be able to put those RESP funds to use to further their education.

So you might just want to take another look at those articles at Ken Pope's site concerning The Long Term Benefits of RESPs and Using Registered Education Savings Plans For a Child with Developmental Disabilities. After all, you wouldn't your child to be among those losing out, would you?

** A financial advisor, I will never be. So just as the advice on this blog can't be taken as 'legal advice', neither can it be taken as 'financial advice". It can, however, in good stead be taken as practical, common sense advice from one parent to another. That being said, however, do do your own research and meet with a financial advisor, if practical.

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