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 No funds will be withdrawn from the RESP or excess savings before the child turns 18, the assumed age at which the child will begin post-secondary education.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