Comments on: RESP – Individual and Family Plans – Updated 2012

By: Mike Holman

Mike Holman — Tue, 17 Jan 2012 18:02:03 +0000

@Angela

Can he pull the money from the individual plan and spread it across the three of them in the family plan?

Yes.

If so, what happens to the grant money that has been saved up for her until this point in time?

It will likely get spread around too.

Also, if he does pull his money, does it take all the grant money from the contributions I have made also.

Nothing he does in his account will affect your RESP account.

Can he pull any money that i have saved because it is for he?

He can’t touch the RESP that is your name. If you are talking about money that you have put into the RESP that is in his name, then yes – he can do whatever he likes with it.

By: Angela

Angela — Mon, 16 Jan 2012 06:23:31 +0000

Hi
I have a daughter who is 17 and will go into University in Sept 2012. Her father and I each have individual plans for her as we are divorced. He has since become common law with a woman who has boys 9 and 11. I have heard from my daughter that he has now made the individual plan into a family plan. How does this affect her? Can he pull the money from the individual plan and spread it across the three of them in the family plan? If so, what happens to the grant money that has been saved up for her until this point in time? Also, if he does pull his money, does it take all the grant money from the contributions I have made also. Can he pull any money that i have saved because it is for he?, I am worried that he has actually done this in the
fact that she may have no money to go to school
with. Help!

By: Mike Holman

Mike Holman — Tue, 03 Jan 2012 22:45:45 +0000

@Sandy – the market-linked products are almost always a bad deal.

I would look into a balanced mutual fund – then switch to GIC for the last 7-9 years.

By: Sandy

Sandy — Tue, 03 Jan 2012 21:58:33 +0000

Hello,

We were thinking of doing a market-linked RESP with TD for about 10-12 years and switching it to a GIC for the last 7-9 years. Do you advise staying away from market-linked (which allows monthly contributions) entirely?

By: Michael

Michael — Wed, 28 Dec 2011 03:52:05 +0000

Hi Mike,

Great blog!

My wife and I are expecting the birth of our first child any day now. I am planning to open an RESP account. With the plan to have a second child in the next 2-3 years, should I open an individual RESP account or a Family RESP account for my first child? What are the pros and cons of both?

Thanks.

By: Rajib

Rajib — Wed, 07 Dec 2011 03:14:09 +0000

Hi Mike,
Quick question – I have set up an Individual RESP for my soon to be 2 year old son and maximized two years worth of grants into it. My second child is now on the way. Is it beneficial for me to switch my existing RESP Individual plan into a Family Plan to accommodate number two? There might be a third kid down the road if that makes a difference at all.
Thanks.

By: Mike Holman

Mike Holman — Thu, 27 Oct 2011 13:12:42 +0000

@Mike O – Thanks for catching that. I used the word “contribution” instead of “grant”. It’s now fixed.

By: Mike O

Mike O — Thu, 27 Oct 2011 02:52:18 +0000

Just reading through the page…your wording for lifetime contributions is incorrect. It says $7200. Actually, this is the maximum amount of CESG that will be paid per beneficiary. The lifetime maximum contribution per beneficiary is $50,000 now. Annual maximum contribution that can receive CESG is now $2,500 per year (paying out $500 in CESG) unless there is carry forward, in which case you could receive grant of up to $1000 (20% of $5000). You can always put more than the max amount that can receive grant in a year, however, are subject to the $50,000 lifetime amount. If you do the math, the maximum amount of lifetime contribution that you can make to receive max CESG is $36,000 (x20% equals the $7200 max CESG) so why do any more (up to $50000)?? Because withdrawals and gains are taxed in the kids’ hands, not yours. Hope this helps

By: Mike Holman

Mike Holman — Thu, 08 Sep 2011 14:40:39 +0000

@Cha – Read these two posts:

http://www.moneysmartsblog.com/withdrawing-money-resp-account/ (read #8)

http://www.moneysmartsblog.com/how-to-withdraw-excess-money-from-your-resp/

By: Cha

Cha — Thu, 08 Sep 2011 06:57:38 +0000

Hi Mike,

What will happen if the child pursues a short-term course and s/he does not use up all the money in his/her RESP? Will the remaining money be given back to the subscriber?

Thanks.