What Should I Do With My Tax Refund?

Thomson Schindle Green (TSG) Insurance Company is a full-service, independently-operated insurance brokerage that provides insurance policies as well as financial planning where our specialist can often help with regards to lifestyle and business planning as part of your wealth management goals. As tax season has now come to a close for 2017, our wealth management specialist are being asked, “What can I do with my refund?” Read more

Financial Planning for Retirement in Alberta

The Globe and Mail reported in February 2016 that “Half of Canadian couples between 55 and 64 have no employer pension between them, and of those, less than 20 per cent of middle-income families have saved enough to adequately supplement government benefits and the Canada/Quebec Pension Plan,” according to a Broadbent Institute report.

The article goes on to note that the “Canada Pension Plan pays out a maximum $12,780 a year. But many retirees don’t qualify for the maximum – the average CPP payment for men last year was $7,626 while the average for women was $5,922. Seniors also collect Old Age Security payments to a maximum of $6,839, while the poorest seniors can collect the Guaranteed Annual Income.”

An Ipsos-Reid survey done for the Chartered Professional Accountants of Canada (CPA-Canada) reports that 25 percent of their respondents have never made a savings contribution and 29 percent said they had no money left over to save after paying expenses. Particular problems today include debt; a lack of pension provision; wanting to support children through education and beyond; caring for parents; and, for wealthier people, inheritance tax. When it comes to financial planning, the main issues remain pensions, mortgages, wills, and life insurance. Read more

RESP: What You Need to Know (and Why You Need One)

There are a lot of acronyms in the world of finance. If you are just starting to learn more about your own financial position and invest your money smarter, stronger and with a focus on the future, it can be overwhelming and confusing to keep up. Luckily, TSG Insurance is here to provide residents of Calgary, Medicine Hat and Brooks with guidance and advice when it comes to their personal finances. Alongside comprehensive insurance services, we offer financial planning assistance so that you can understand where and how your money will serve you best.

One acronym you don’t want to ignore when planning for your family is RESP. It stands for Registered Education Savings Plan and can make a huge difference in how your child is supported throughout their education. Read below to learn more about this popular and important investment option, or contact the team of dedicated professionals at TSG Insurance today to get answers to your questions.

Benefits of an RESP

An RESP makes it simple for you to regularly contribute to your child’s education fund. You’ll be able to start early and give your child the chance to focus more on studying and less on saving when the time comes for them to attend post-secondary school.

Here are just a few benefits of setting up an RESP for your child or children:

  • Government Contribution: The Canadian government will contribute up to $500 per year, per child through the Canada Education Savings Grant (CESG). You can take advantage of this perk until your child turns 17, so the sooner you set up your child’s account, the better.
  • Flexibility: RESP accounts offer many options. You can determine how much you want to withdraw and when you will take the money. The funds can be put towards any education-related expenses, from tuition to books or living expenses.
  • Tax Benefits: When used, the earnings and government contributions will be taxed to your child. As a student, that typically means very little taxes need to be paid. Additionally, the growth of the RESP is tax-sheltered as long as it remains in the plan.

Want to learn more about financial planning for you and your family’s future? TSG Insurance has a team of financial services experts who are eager to help. We can listen to your unique concerns and priorities and direct you towards the products, services, and investments that are best suited to you. Our team has over thirty years of experience providing residents of Alberta with insurance quotes and financial planning assistance. Get peace of mind that your money is going as far as possible with an RESP and other smart investments. Contact us to make an appointment, request a quote now, or call us to schedule your appointment.

Start financial planning for your children’s future today. Visit TSG Insurance in Calgary, Medicine Hat or Brooks or contact us online today with your questions. You can also give us a call toll-free at 800-830-9423.

What’s an RESP? The Smart Path to Your Child’s Registered Education Savings Plan

Education, it seems, is an increasingly critical commodity. As a parent, you hear a lot of advice on the subject. Even though all the data suggest it’s time to begin saving for your child’s future education, you may feel overwhelmed. Where should you start?

Before you jump in to a savings education plan, prepare yourself by learning the key details to a successful RESP.

Define the Plan

On a basic level, a Registered Education Savings Plan, or RESP, functions as a tax-deferred account. In this way, it’s not unlike your retirement account or any other tax-deferred plan. Here’s an overview:

  1. The plan involves a subscriber, a promoter, and a beneficiary. The subscriber is the person who contributes to the account (usually the parent). The promoter is the party that pays the income to the beneficiary, or child.
  2. The plan is registered via the Canada Revenue Agency.After the plan begins, the Income Tax Act limits the total contribution to a $50,000 maximum per beneficiary.
  3. Learning bonds provide for low-income families. This is a supplementary contribution by the government. It contributes up to $2,000 maximum to those families who qualify (e.g., families who make less than $35,000).
  4. The subscriber can enter funds for several beneficiaries.In this way, the RESP contract allows the provider to pay education savings payments to multiple children, simplifying the process for the parent(s).
  5. There are multiple RESP types.You may choose a family plan, as just mentioned, or an individual plan. Additionally, you can decide to enter funds intermittently, monthly, or using another pre-determined schedule.

Understand the Details

Because each family’s situation is unique, so is your RESP. Some families begin saving for their children’s education costs early; others begin when their children are teens. The important thing is to start where you are now.

Did you know that you can make contributions to your child’s RESP up to 31 years after initiating the plan? Additionally, you can consolidate several RESPs even after 31 years have passed. The only stipulation is that your child uses the payments before the 35th year is over.

Here are a few other strategies that may yield greater benefits later:

  • If you contribute $2,500 annually starting in your child’s birth year, you may net the maximum contribution for the RESP by your child’s 18th birthday.
  • Even if you wait until your child is 10 or 11 to start the account, you may still net close to $40,000 for the same annual investment.
  • If you contribute an extra, one-time lump sum annually, you’ll compound the tax benefit.

Ask Good Questions

As you begin a RESP for your child or children, pay attention to the notices and updates you get on your account. Stay involved and up-to-date all along the way so you don’t have any unintended surprises later. Most importantly, ask questions when you’re unsure about the regulations.

Here are a few questions and answers that can help you during the saving years:

Q: What do I do if there are unused savings in the RESP after 35 years?

A: Don’t worry; any leftover savings will be returned to the subscriber. Grant moneys are returned to the government. If you’ve earned interest, you’ll get that if you’re a Canadian resident who opened the plan more than 10 years prior—and if your child is 21 or older and ineligible for educational assistance payments.

Q: What if my child doesn’t go to college after all?

A: It’s possible your child may change his or her mind; you have up to the 35-year limit past the opening of the plan. If your child’s plans don’t change, feel free to transfer the money to another RESP (ask ahead to know if there are penalties involved).

Q: Can I add another child to an existing plan?

A: Yes, but your child must be a blood relative or adopted. Additionally, your child should already be a listed beneficiary in a different RESP and be under age 21. If the beneficiary is not adopted or related to you by blood, you will be required to repay any applicable government bonds and grants.

Consult a Specialist

Finally, you don’t have to go it alone, even if you feel prepared to do so. Your financial planner is a capable ally who knows all the details behind Registered Education Savings Plans. He or she wants to prepare you first so you’ll avoid disruptions as time goes by.

Another benefit to working with a finance and insurance professional is the fact that all your investments are taken care of in one place. When you’re trying to balance your retirement savings plan with your segregated funds and other tax-free accounts, it helps to know all of those can be managed by people you trust.

Congratulations on making a great financial future for yourself and your children. With your help, their future RESP benefits are assured. Talk to your financial professional today at TSG Insurance & Financial Services Ltd.

Calgary Insurance: 403.526.3283

Brooks Insurance: 403.501.5123

Medicine Hat Insurance: 403.723.9416

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