To determine your RESP outlook, this tool makes a number of assumptions regarding contributions, grant eligibility and calculations.

1. This calculator assumes a child will begin their post-secondary studies at age 18 and contributions will end December 31st of the year before the child turns 18.

2. As of January 1st of the year a child turns 18, the monthly contribution will be reduced by the amount that was going toward that child and that amount will no longer be included in the RESP calculation. Those funds are not redistributed to the remaining children.

3. This calculator only incorporates the Canada Education Savings Grant (CESG) which is provided by the government of Canada. Other government education grants and incentives for RESPs are based on certain qualifying conditions and are not included in the grant calculations.

4. For each child, the Government of Canada will match 20% of up to $2,500 of total contributions to all RESPs for the child (to provide CESGs of up to $500) for each year, up to a lifetime CESG limit of $7,200.

5. When total RESP contributions are less than $2,500 in a year, unused CESG entitlements can be carried forward. If “catch up” contributions are made and total contributions are more than $2,500 in a future year, the CESG received in that year may be more than $500. The maximum CESG that may be received in any year is $1,000, with total contributions of $5,000. The calculator does not include the potential effect of any “catch up” contributions and limits CESG to $500 in each year.

6. The maximum lifetime RESP contribution amount is $50,000 per child. The calculator will restrict the amount of total contributions treated as RESP to $50,000 per child. Any excess contributions until a child reaches 18 are assumed to accumulate in a non-registered account. This calculator does not include income growth or tax on these excess funds.

7. No funds will be withdrawn from the RESP or excess savings before the child turns 18, the assumed age at which the child will begin post-secondary education.

8. Calculations are based on full years or twelve months. No partial years are considered. Contributions are assumed to start January 1 of the current year and continue until December 31 of the year the child turns 17.

9. This calculator does not factor in any inflation. Flat and recurring monthly contributions continue throughout the assumed time period.

10. Any government RESP program restrictions are based on today's amounts and do not consider future changes to the program.

11. Contributions and CESG amounts are assumed to be received at the start of the month. Investment returns are assumed to be received at the end of every month.

12. The RESP rules state that the maximum CESG entitlement is $500 per year of eligibility, up to a maximum lifetime CESG of $7,200 per child. Eligibility for CESG starts as soon as the child is born. The maximum age for CESG eligibility is 17. However, to qualify for CESG at age 16 and 17, past RESP contributions need to meet certain conditions. This calculator assumes all children qualify until the maximum age of 17.

13. The combined outputs presented by this calculator depict savings totals achieved when each individual child turns 18. Due to current age discrepancies between your children, these savings totals will not be achieved in the same calendar year.

14. The calculator assumes monthly compounding using the geometric approach to convert the annual expected rate of return to a monthly rate; contributions and grant amounts will start to earn investment income as soon as they are considered received.

15. The RESP program has maximum annual CESG limits per child. This calculator calculates CESG amounts at 20% of monthly contributions up to a maximum of $41.67 per child. (The $500 maximum for a year divided by 12 months).

16. If you enter existing RESP savings for a child, the calculator assumes that 16.67% of those savings are CESG that the RESP has already received for that child while also considering:

• the maximum lifetime CESG total of $7,200
• the maximum potential accumulated CESG based on the child’s age ($500 per year of eligibility starting at age 0).

The 16.67% is a calculated percentage to ensure that past total CESG received will be no more than 20% of past total contributions. There is no historic investment growth assumed on past total CESG received.

17. If you enter existing RESP savings for a child, the calculator takes the total amount and subtracts the assumed CESG.

If the remaining amount is less than $50,000, it is assumed these funds are:

• RESP contributions made for a child
• past RESP contributions deposited evenly across the years of the child's life to date
• past RESP contributions with no historic investment growth assumed

If the remaining amount is more than $50,000, it is assumed these funds are past RESP contributions and capped at $50,000 with any remaining funds assumed to be historic growth on those contributions.

18. To calculate future CESG availability the calculator takes the lifetime maximum of $7,200 and subtracts any assumed past CESG. To calculate future RESP contribution room, the calculator takes the lifetime maximum of $50,000 and subtracts any assumed past RESP contributions.

For more details about RESPs and to determine the RESP strategy that is right for you, please speak with an advisor Opens in a new window..

An RESP (Registered Education Savings Plan) is a type of tax-sheltered investment plan that lets you save money for a child's post-secondary education. The government encourages these types of plans by providing incentives. For each child, the Government of Canada will match 20% of up to $2,500 of total contributions to all RESPs for the child (to provide CESGs of up to $500) for each year, up to a lifetime CESG limit of $7,200. Usually a parent or grandparent opens an RESP for a child, but there are options for non-family members to open an RESP as well. An advisor can help you determine what type of plan is right for you.

There are three roles involved with an RESP:

• Subscriber
  The subscriber is the person who opens and contributes to the RESP.
• Promoter
  The promoter is the organization that administers the RESP.
• Beneficiary
  The beneficiary is the child who benefits from the RESP by receiving funds from the RESP when they attend post-secondary education.

First, the subscriber opens the RESP with the promoter and names the beneficiaries. The subscriber makes contributions to the RESP through the promoter. The promoter applies for the government grants on behalf of the subscriber.  The subscriber is responsible for investment decisions and requesting distributions from the RESP. The promoter distributes funds from the RESP.

The Canada Education Saving Grant (CESG) is an incentive provided by the government of Canada. For each child, the Government of Canada will match 20% of up to $2,500 of total your contributions to all RESPs for the child (to provide CESGs of up to $500) for each year, with up to a lifetime CESG limit of $7,200 per child.

There may be other RESP incentives available based on your income and the province where you live. Learn more about these additional incentives.

Any Canadian resident who has a social insurance number can be named as a beneficiary of an RESP, but beneficiaries only qualify for the Canada Education Savings Grant (CESG) up to the end of the calendar year in which they turn 17. Children who are 16 or 17 years old must also meet one of the following two conditions before the end of the calendar year they turned 15 to qualify for CESG:

• $2,000 (minimum) was contributed to, and not withdrawn from their RESP
• in at least four of the years before the end of the year they turned 15, an annual contribution of $100 (minimum) was made to, and not withdrawn from their RESP

If you contribute $2,500 to a child's RESP during a calendar year, their RESP will earn the maximum Canada Education Savings Grant (CESG) of $500. If you contribute less than $2,500, unused CESG entitlements are carried forward but an RESP cannot receive more than $1,000 of CESG in a single year.

There are many things to consider when thinking about the costs of post-secondary education, including tuition, living expenses, and more. It's also important to consider how far into the future these expenses might happen and what that means to your saving strategy.

To learn more about how much you might need to save for your children's post-secondary education, check out our Smart Advice article.

Money in an RESP can be used for a variety of post-secondary education expenses. Typical expenses include:

• Tuition
• Books
• Residence fees or rent
• Living expenses
• Equipment like a computer or lab supplies

If your child has other costs that you think are required to further their studies, you can ask your promoter (i.e. the financial organization that administers the RESP) to provide a list of allowable expenses. Your promoter must follow the rules of the Income Tax Act and will determine what's considered a “reasonable” expense that can be paid for with savings from the RESP. They may also ask for receipts for school-related expenses to prove the money is being spent on allowable educational expenses.

When your child requires funds for post-secondary education, you will need to contact your RESP promoter and provide proof of your child's enrollment in an eligible educational institution Opens in a new window.. You might also be asked for receipts for allowable expenses like books and transportation. The promoter will then pay out the funds from the RESP.

There are a few options to consider if your child chooses not to attend post-secondary education. You can:

• Leave the RESP open — An RESP can generally stay open for up to 36 years, so your child can take some time deciding if they would like to pursue furthering their education.
• Transfer to another child — If you have a family RESP and one child will not be attending post-secondary education, you can use the earnings and certain federal and provincial incentives for the education of other children who are beneficiaries of the plan. Generally, with individual plans, you can name a new beneficiary, but certain rules apply.
• Transfer to a Registered Retirement Savings Plan (RRSP) — You may have the option to transfer up to $50,000 of the income and growth earned in an RESP to your RRSP if you meet certain criteria.
• Transfer to Registered Disability Savings Plan (RDSP) — You may be able to transfer investment earnings from an RESP to an RDSP if you meet certain conditions. Government incentives must be repaid.
• Close the RESP — When you close an RESP, you can withdraw your contributions without any tax implications and you must return all financial incentives the government contributed to the RESP. The income earned in the RESP can also be withdrawn but taxes will apply. Government incentives must be repaid.

You can learn more about the options available to you if your child does not continue their education after secondary school at the Canada Revenue Agency Opens in a new window..

Since the funds contributed to an RESP have already been taxed, the amount of contributions is not taxed at all when it's withdrawn. There is no tax on investment income and growth that is earned inside an RESP. Contributions, which were originally made from after-tax income, can be withdrawn from an RESP tax-free. Education Assistance Payments (EAPs), which include distributions of income, growth and government assistance, are included in the child’s income.  Depending on the child’s other income, they may pay little or no tax.