OTTAWA — Parents across the country are getting ready to tap into registered education savings plans to help pay for their children's post-secondary schooling this fall.Andrew Craig and his wife opened an RESP account for their eldest daughter when she was two. When the time came last year to start spending the money there was about $24,000 in the account.
Christine Van Cauwenberghe, head of financial planning at IG Wealth Management, says before you start withdrawing that RESP money you should be lowering the risk level of your portfolio because you don't want a surprise crash in the market when you need to start spending the money. There are no limitations on the withdrawal of the amounts that you contributed to the plan. However, there are limits to educational assistance payments during the first 13 weeks of post-secondary studies.
But if they worked for a full year before starting their program or have other sources of income, they could face a higher tax bill.