Frequently Asked Questions - RESP


What are the assumptions used for the RESP module?

The monies will only be used by the beneficiaries in the future.
  • The value of an RESP account does not factor into the personal Net Worth calculations.
  • Any future withdrawals from an RESP account WILL NOT impact the client's Cash Flow.
A lifetime contribution limit and the total Canadian Education Savings Grant (CESG) a child are enforced.
  • A lifetime contribution limit of $50,000 per child.
  • The total CESG a child can receive is $7,200.
The RESP account asset mix is assumed to be 60% equity and 40% fixed income, a typical balanced portfolio.
  • You can manually adjust this by clicking on the value in the Rate column under the RESP on the main projections page. Please click here for details.

All RESP plans are Family plans, for which you can add multiple beneficiaries.
  • To model an individual plan, enter only one beneficiary.

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Contributions and Withdrawals

a. How to enter a contribution and withdrawal in the same year?

(For example, if one beneficiary enters the decumulation stage, but there are still contributions for another beneficiary) 

  • Each beneficiary has a Contribution (Withdrawal) column to manage the planned contributions and withdrawals to/from the RESP.  One beneficiary can be withdrawing funds while there are contributions still being made for other children in the plan. 

b. How to enter a contribution from a 3rd party source like a grandparent?

  • Enter a new non-taxable income in the given year(s), which represents the extra cash flow for the RESP contribution from the 3rd party. If the automatic contribution amount is less than the 3rd party contribution amount, then manually input the additional contribution.  For example, a $15,000 total RESP contribution consists of $5,000 for each child, which has been manually entered under the three Contribution (Withdrawal) columns.  

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Canada Education Savings Grant (CESG)

a. Does Snap Projections account for Canada Education Savings Grant (CESG) catch up?

Yes, if you manually enter an increased RESP contribution to attract that additional grant catch up.

  • In practice, the 20% CESG is matched by the government up to a $2,500 RESP contribution per year.  If you miss a year or start contributing late, you can retroactively claim a missed year's grant up to an additional $500 per year ($1,000 in total). 
  • For example, for a single beneficiary, if a contributor missed 2022 and 2023's contribution, then in 2024, a contribution of $5,000 will attract $1,000 of CESG (i.e. $2,500 contribution and $500 CESG for 2024, and $2,500 contribution and $500 CESG for 2023 catch up).  In 2025, another $5,000 contribution will attract another $1,000 worth of grant (i.e. $2,500 contribution and $500 CESG for 2025, and $2,500 contribution and $500 CESG for 2022 catch up.)
  • If you have selected the auto-contribution setting under the RESP account set up, Snap will display automatic contributions to the RESP to attract one year's worth of CESG only. Because of the high degree of uncertainty and complexity in tracking the missed CESG, we have decided that for this version of the RESP module there will be no automatic modelling of increased RESP contributions to attract the CESG catch up.  You can manually enter the increased contributions though, and the additional CESG grant will be populated if it is applicable. 
  • For example, for an RESP with a single beneficiary, and an additional $500 of catch up CESG available, enter $5,000 under the RESP Contribution column.  (i.e. $2,500 current year's personal contribution and $2,500 personal catch up contribution, and $1,000 of CESG will be displayed automatically.)  The first year's contribution is yellow to indicate a manual override on the automatic $2,500 contribution which would have been made.

b. Does the RESP module account for the extra CESG for low-income families? Canada Learning Bond? Other applicable Provincial benefits?

  • Not at this time.

c. What happens to extra contribution on top of the amount that would attract the CESG?

  • Any extra contribution will be allotted to the beneficiary without attracting a grant. Once the lifetime limit of $50,000 contribution is reached, Snap will prevent subsequent contributions.

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What is the Education Cost column used for?

  • On the Education Savings data entry page, there is a field for Education Cost.  This is where you enter the amount that you would expect the beneficiary to withdraw for one year of education, in today's dollars (including food, accommodation, tuition, etc.).  A projection of this cost is displayed under the Education Cost column on the Planning page. (Click here for a summary of tuition fees for various fields of study across Canada.)
  • This column is visible to guide you on the withdrawal amount for a future year of education.  Before education starts, the Education Cost value is $0. The cost inflation that you entered is factored in for you.  If you check the box for auto-withdrawal, the RESP will have automatic withdrawals made each year based on the projected education cost for the number of years of education.
  • For example, an education cost of $20,000 today would be $25,335 in 8 years with 3% inflation, and with the auto-withdrawal checkbox enabled, that is the withdrawal amount that year. 

  • The Education Cost column is mainly for information purposes, it does not affect the projections. However, it does affect the automatic withdrawals from RESP. As such, you can use it to fine-tune these entries if necessary.

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How to cover the shortfall in the RESP with the subscriber's assets?

If the RESP withdrawals cannot provide income for the entire education cost, you may wish to model additional withdrawals from the client's assets to cover the shortfall.

  • You can supplement the RESP withdrawals with additional income from the client's assets.  In this case, the first step is to create an additional expense for the client in the applicable years.  Next, you may wish to show a withdrawal from a specific capital asset to cover this expense.
  • For Kelsey's education needs in this example, the projected education cost in her last two years of education is greater than what is available in the RESP.  The software will not make withdrawals from other assets automatically to cover this shortfall.  If the parent expects to cover the remainder of the education costs in those years, you could show an additional expense for this in the projections.  (i.e. Create an expense of the Education Cost minus the RESP withdrawal, which is $24,114 - $12,105 = $12,009 for the 3rd year of Kelsey's education, and the full education cost for the remaining year.)

  • In the example, in the year 2033, we have also entered a withdrawal of $12,009 from the Non-Registered account, as indicated by the cell with the yellow highlighting.  This is due to the fact that before age 50 the automatic contributions and withdrawals from the Financial Assets are disabled because the CFM Start Age (the 3rd column from the left) is set to age 50.  In order to show a withdrawal from the Non-Registered asset to cover the additional education expense, we have to enter it manually before then.  From age 50 onwards, you can see that the software automatically withdraws enough from the Non-Registered account to meet the desired Base Expenses of $60,000 per year (in real dollars), plus the education expense.  In 2035, the automatic non-registered account withdrawal is smaller because the education expense is not applicable that year. 

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