Focus on Future Grads

Use a TFSA and RESP strategy for your child's future education.

Although the TFSA does not have the added incentives of the Canada Education Savings Grant (CESG) or the Canada Learning Bond (CLB), it does offer flexibility that is not available in the RESP. Taxpayers and their tax and financial advisors should be focusing on the most appropriate way to save for post-secondary education now and deploy tax refunds wisely to leverage tax efficient savings opportunities.

For example, with a TFSA, there are no time limits on the contributions, no age limits on the beneficiaries (although you must be 18 and a resident of Canada to contribute to a TFSA), and no limits to the amount that can be withdrawn in any given year. Plus, the withdrawals will not have to be reported in income—whether the beneficiary becomes a student or not. On the flip side, TFSA investors give up access to the CESG and CLB. Professional advisors can help by doing projections on savings accumulations over time to help choose the right option.