Saving for post-secondary education can seem daunting. Parents who have toddlers right now can expect to pay $150,000 for an undergraduate degree in 2031 if the child lives away from home, finds a TD survey.
Further, 29% of parents with children under the age of 18 aren’t saving for their child’s education. And 50% of parents say it’s the costs associated with raising children, including daycare and extracurricular activities, that’s impact their ability to save.
But there is some relief. As of July 20, 2015, families will receive more from the government — a universal childcare benefit of $160 a month for each child under six years old (previously $100 a month). Also, there’s a benefit of $60 per month for each child between the ages of six and 17. These payments will be retroactive to January 1, 2015.
Clients can maximize this benefit by setting up an RESP, notes TD. If they do, the federal government’s Canada Education Savings Grant program pays a 20% grant on contributions, up to a maximum of $500 per year. If a family has two children under six years old, and they make a lump sum RESP contribution with their increased childcare benefits, that’s a total $1,040.