Today we have a guest post from Mohamad Sawwaf, Division Director and Financial Consultant from Investors Group Financial Services.  Mohamad is a Certified Financial Planner who is devoted to helping clients realize both their short and long-term financial goals through comprehensive planning.  Mohamad can be contacted at 416-483-7667 or

Help secure your family’s future

As a parent, you have to be a terrific juggler. You juggle time to complete all the tasks and chores that fill your day. You juggle responsibilities to ensure your children have the best possible childhood and prospects for their future. Yet the toughest juggling act of all is managing your finances while raising a family. It can be even more difficult to find the extra dollars needed to invest towards a comfortable financial future, including your retirement and the educational plans of your children.

Screenshot 2014-09-08 at 11If you’re a parent of young children, you are probably struggling with a tough decision: Is it better to first save for your retirement through registered retirement savings plans (RRSPs), or to save for your children’s education through registered education savings plans (RESPs)?

Fret no more because there is a way to do both: Make your RRSP contribution before the deadline each year and use the resulting tax refund to make an RESP contribution. That’s the ultimate “double-dip” because your child’s RESP can also take advantage of “free” cash from the federal government in the form of a Canada Education Savings Grant (CESG).

Here’s why the ultimate “double-dip” works so well:

  • When you make your maximum allowable RRSP contribution, you may enjoy tax savings that can be applied towards establishing or adding to your children’s RESPs.
  • The federal government’s CESG program provides a matching grant for each RESP contribution made for an eligible child. The Basic CESG is worth 20 per cent on the first $2,500 of an annual RESP contribution or $500 per year. This eligibility accumulates and carries forward, so even if you were unable to make enough of an RESP contribution to access the full Basic CESG money in previous years, you can start to make up for it now and in future years and get the Basic CESG money your child would have received in those earlier years.
  • Families with children born after December 31st, 2003 who also receive the National Child Benefit Supplement may also qualify for additional funds through the Canada Learning Bond.

Start now

Finding the funds to make an annual RRSP contribution may seem difficult – especially, with all the daily juggling going on in your life. So why not start now? Talk to me about setting up a Pre-Authorized Contribution (PAC) to make monthly RRSP contributions. Your RRSP will begin to compound on a tax-deferred basis for potentially stronger growth over the long term. You can even arrange for your employer to reduce withholding taxes at source based on your RRSP contribution schedule, so that you can make monthly RESP contributions instead of waiting for your tax refund in the spring to make an annual RESP contribution. It’s a win-win situation that will allow you to also capitalize on the ultimate “double-dip”.

Let us help you feel more confident about your future – plus make sure you take full advantage of all the tax-saving and income-building opportunities that are available to you.