Money & Finances
4 Ways to Invest in Your Grandchildren’s Future
T
he bond between grandparents and grandchildren is special. You get to share your wisdom and stories with eager listeners and occasionally, you get to treat them to ice cream before dinner. If you’re able, you may want to plan to leave a legacy for your grandchildren. One of the best ways to set them up for a successful future is to contribute to their education savings.
Four strategies that can help you make smart investment choices for your grandchildren: 1. Coordinate RESP contributions with your adult children Registered Education Savings Plans (RESPs) are specifically designed to help parents and grandparents save for a child’s education. They offer opportunities for: • Government matching. Canada Education Savings Grants (CESGs) match 20 per cent of your contributions up to a maximum grant of $500 each year • Tax-deferred investment growth. No tax is due until your grandchild starts withdrawing money to pay for post-secondary education A child can be named as a beneficiary on more than one RESP. However, there is a lifetime contribution limit of $50,000 per child and this can get complicated to track across multiple plans. Find out if your children have opened an RESP for your grandchildren, and then coordinate your contributions with theirs.
For more information visit Manulife at manulife.ca.
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2. Consider giving your adult children the money to ontribute Rather than contributing directly to the RESP, you may want to give your children money so that they can contribute more to their child’s RESP. This can protect you from taxes if your grandchild decides not to pursue post-secondary education.
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