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moneysense.ca, 11/12/09
RESP calculator: notes, assumptions and suggested strategies
RESP calculator: notes, assumptions and suggested strategies
The basics
Tax-free growth: The money you contribute into an RESP (Registered Education Savings Plan) grows tax-free until withdrawn.
Contribution limit: You can contribute up to a maximum of $50,000 for the duration of the RESP.
CESG maximum: CESG (Canada Education Savings Grant) payments end at $7,200.
Household income and CESG payments
If your annual net family income is more than $77,664: For every dollar you contribute up to $2,000, the federal government will add 20 cents in the form of the CESG. The maximum possible CESG payment each year is $400 to a maximum of $7,200 over the life of the RESP.
If your annual net family income is between $38,832 and $77,664: the federal government will add 30 cents to every dollar for the first $500 you contribute, and 20 cents to every dollar on the next $1500. The maximum possible CESG payment each year is $450 to a maximum of $7,200 over the life of the RESP.
If your annual net family income is less than $38,832: the federal government will add 40 cents to every dollar for the first $500 you contribute, and 20 cents to every dollar on the next $1500. The maximum possible CESG payment each year is $500 to a maximum of $7,200 over the life of the RESP.
Assumptions
You contribute early in the year: You make your contribution at the beginning of the calendar year to gain a year’s worth of extra growth.
moneysense.ca, 11/12/09







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