An overview of the trials and tribulations in dealing with Heritage Education Funds (Heritage RESP). The hard lessons learned between group savings and self-directed plans.
Thursday, April 12, 2012
Staying Informed & Making The Right Choice for You!
I'd like to point out a new link we've added to the site called, Choosing the Right RESP from the Government of Canada website: It illustrates the differences between RESP plans. Take a moment to explore the site it's very helpful! :)
I am very happy to have come across this blog. As Canadians, we have the ability to invest in tax sheltered/preferred investments. It is important to understand and be sure to ask any and all questions to ensure you are making the right financial decisions for your family. The Service Canada and CanLearn websites are excellent tools in making informed choices. A great checklist found in an RESP booklet at Services Canada offices includes the following questions: -Does it cost anything to open an RESP? -Once I have opened an RESP, will I have to pay any fees? If so, what are they for and how much will I have to pay? -Do I have to put a minimum amount of money into an RESP? -Do I have to make regular payments? -What happens if I cannot make regular payments? -What are my investment choices? What are the benefits of each choise? Can the value of my investment go down? -Can I withdraw money if I need it? Are there any fees or penalties for withdrawing money early? -Can I transfer the RESP to another person, or to another RESP provider? What is the cost to transfer? -What will happen to my savings in the RESP if the recipient of the RESP does not continue with his or her education after high school? -Does the RESP provider limit the types of qualified educational programs that I can use my RESP for? -What happens if I close my RESP early? -What if my child goes to school part-time? If dealing with a group plan provider it is very important to ask what happens to your money if your child does not continue with education right after high school or if the child decides to go to school part-time. Another important piece of information regarding RESPs is the lifetime maximum limit of $50,000. There is no annual contribution limit, but the government will only add a grant on the first $2,500 saved annually. Any unused grant can be carried forward, so if cash flow does not allow for generous contributions as soon as your child is born there is no need to worry, as if you have an individual plan contributions can be adjusted at any time.
As an individual RESP provider I find it important to help educate Canadian families on the choices they have available to them. I have clients who are regretting their decision to sign up with Heritage and have opened additional RESP plans to ensure their child will get the education they have paid for in fees.
This is one of the major concerns for families that still have yet to cash in their chips. Can you or your family offer any suggestions on how to proceed when it is time to get their investment money?
Is there anything we should be on the look out for... signs that they will create an issue? We'd appreciate your feedback!
You can withdraw the money you contributed less the government's match, membership fees and (please correct me if I'm wrong)the interest you accumulated on your money. Membership fees could represent thousands of dollars depending on how many units you have accumulated.
"Membership Fee" means, in the case of enrollment in the Heritage Plans, the $100 per Unit fee deducted from Contributions by the Depository which is a commission to the Distributor for its distribution services.
A Heritage Rep will tell you that this fee will be returned upon maturation of the RESP, but if you read the fine print it actually says on your statement that there is no guarantee that it will be returned.
They do not give interest on the your contribution only the government grants , we were misled to believe we would receive interest on our contribution , Due to unforeseen financial problems we needed to pull our contributions , I would not recommend Heritage to anyone .
I am very happy to have come across this blog.
ReplyDeleteAs Canadians, we have the ability to invest in tax sheltered/preferred investments. It is important to understand and be sure to ask any and all questions to ensure you are making the right financial decisions for your family. The Service Canada and CanLearn websites are excellent tools in making informed choices.
A great checklist found in an RESP booklet at Services Canada offices includes the following questions:
-Does it cost anything to open an RESP?
-Once I have opened an RESP, will I have to pay any fees? If so, what are they for and how much will I have to pay?
-Do I have to put a minimum amount of money into an RESP?
-Do I have to make regular payments?
-What happens if I cannot make regular payments?
-What are my investment choices? What are the benefits of each choise? Can the value of my investment go down?
-Can I withdraw money if I need it? Are there any fees or penalties for withdrawing money early?
-Can I transfer the RESP to another person, or to another RESP provider? What is the cost to transfer?
-What will happen to my savings in the RESP if the recipient of the RESP does not continue with his or her education after high school?
-Does the RESP provider limit the types of qualified educational programs that I can use my RESP for?
-What happens if I close my RESP early?
-What if my child goes to school part-time?
If dealing with a group plan provider it is very important to ask what happens to your money if your child does not continue with education right after high school or if the child decides to go to school part-time.
Another important piece of information regarding RESPs is the lifetime maximum limit of $50,000. There is no annual contribution limit, but the government will only add a grant on the first $2,500 saved annually. Any unused grant can be carried forward, so if cash flow does not allow for generous contributions as soon as your child is born there is no need to worry, as if you have an individual plan contributions can be adjusted at any time.
As an individual RESP provider I find it important to help educate Canadian families on the choices they have available to them. I have clients who are regretting their decision to sign up with Heritage and have opened additional RESP plans to ensure their child will get the education they have paid for in fees.
Terrible company, that misinforms you in the beginning. Fine prints are not made small for no reason!
ReplyDeleteI am the beneficiary of the RESP. I have to say this company is an horrible thing. They will do what it takes to slow down and delay your payment.
ReplyDeleteThis is one of the major concerns for families that still have yet to cash in their chips. Can you or your family offer any suggestions on how to proceed when it is time to get their investment money?
ReplyDeleteIs there anything we should be on the look out for... signs that they will create an issue? We'd appreciate your feedback!
Is there any way to get your money back before they steal it because one my family members is still paying.
ReplyDeleteYou can withdraw the money you contributed less the government's match, membership fees and (please correct me if I'm wrong)the interest you accumulated on your money. Membership fees could represent thousands of dollars depending on how many units you have accumulated.
ReplyDelete"Membership Fee" means, in the case of enrollment in the Heritage Plans, the $100 per Unit fee deducted from Contributions by the Depository which is a commission to the Distributor for its distribution services.
A Heritage Rep will tell you that this fee will be returned upon maturation of the RESP, but if you read the fine print it actually says on your statement that there is no guarantee that it will be returned.
They do not give interest on the your contribution only the government grants , we were misled to believe we would receive interest on our contribution , Due to unforeseen financial problems we needed to pull our contributions , I would not recommend Heritage to anyone .
ReplyDelete