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Funding youth hockey is expensive for parents. The more elite their children get, the greater the fees.

A high price, considering only 0.1% of Ontario hockey kids will ever play one game in the NHL (for more, see “Is the hockey dream worth the investment?”). And, even if that child beats the odds, he may want to attend school after his career.

More likely, though, he’ll simply proceed to university after high school. It’s your job to help parents budget for ongoing hockey fees, while simultaneously funding an RESP for post-secondary schooling.

But it can be a tough sell if they’re certain their kid is the next Sidney Crosby. Present them with these scenarios.

Scenario 1: Child goes to school after a hockey career. Is the RESP beneficial? Yes.

An RESP can remain open for 35 years, giving a player the opportunity to return to school even after a successful NHL stint. The average career length of all retired NHL players is 5.65 seasons, says website Quant Hockey. While the player may have been earning a large salary during those seasons, he may choose to go back to school after retiring. The RESP money would be taxed in the hands of the player, since he is the program beneficiary. In most cases, a beneficiary is in a lower tax bracket than the parents.

This may not be the case for high-earning NHLers, but Frank Di Pietro, Mackenzie Investments’ director of tax and estate planning, says, “If the hockey player’s career is over, they’re likely going to see a sudden drop in tax bracket.” If at that point the player chooses to go back to school, he’ll be taxed at his new, lower tax bracket.

Even better, Di Pietro shows how an RESP can grow if the child doesn’t go to school right away.

When child goes to school at age 18

  • Annual contributions to RESP from age 1-14: $2,500
  • Contribution at age 15: $1,000
  • Total contribution: $36,000
  • Total Canada Education Savings Grant (CESG): $7,200
  • Estimated annual rate of return: 6%
  • Size of RESP at age 18: $81,000

When child goes to school at age 30, after career

  • Annual contributions to RESP from age 1-14: $2,500
  • Contribution at age 15: $1,000
  • Total contribution: $36,000
  • Total CESG: $7,200
  • Estimated annual rate of return: 6%
  • Size of RESP at age 30: $163,000

Scenario 2: Child doesn’t go to school after hockey career. Is the RESP beneficial? Yes, as a safeguard.

If the player has an extended career, or stops playing and immediately starts a hockey-related career (such as coaching or broadcast commentating), what happens to the funds in the RESP? Subscribers (the people who opened the RESP, likely parents or grandparents) can transfer the funds to the player’s sibling.

If he doesn’t have one, subscribers can receive the money as a lump sum, known as an accumulated income payment. Here’s how that works under the different types of plans.

Family plan

“With a family RESP,” says Di Pietro, “it gives parents more flexibility to allocate money amongst other family members.” This plan requires the child to have at least one sibling, and the subscribers must include each child on the plan when it’s opened.

Further, it’s a good idea for parents to allocate amounts for each child. That way, they can maximize their Canada Education Savings Grants, and there’s no confusion about whose money is whose.

If the hockey-playing child doesn’t attend post-secondary, the funds can easily be transferred to his sibling. If the funds are transferred to someone other than a sibling, like a cousin or friend, the subscriber will have to return the grants to the government. Di Pietro adds that, based on legislation, the growth on grants and contributions can be transferred to the new plan.

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