Understanding RESPs in 2025: How Jennifer Took Control of Her Children's Education Savings
Jennifer and her partner, like many dual-career professionals, delayed starting a family until their late 30s. Now approaching 40, they have two young daughters under the age of three. While her husband dives deep into the world of “risk-adjusted returns” and financial theory, Jennifer prefers a simpler, more intuitive path to ensure her kids can access post-secondary education without financial stress.
Her goal? Build a strong, manageable education savings plan—starting with the basics: the Registered Education Savings Plan (RESP).
Why Jennifer Chose a DIY RESP Strategy
Although Jennifer was aware she could use her medical corporation to fund future education costs, she decided to start with an RESP. Why?
Because it’s simple, effective, and comes with free money from the government.
Under current 2025 RESP rules:
The federal government contributes 20% of your annual contribution, up to $500 per year per child
Each RESP has a $50,000 lifetime contribution limit per child
Contributions grow tax-free, and withdrawals are taxed in the hands of the student, often at very low rates
Jennifer kicked off each of her daughters’ RESPs with a $5,000 deposit. With the $500 Canada Education Savings Grant (CESG), each child had $11,000 in total RESP value after just two years. Her plan moving forward: contribute $2,500 per year, ensuring she receives the full CESG each year.
Her Simple, Transparent Investment System
Jennifer opened self-directed RESPs through her bank and invested in low-cost Canadian ETFs, avoiding foreign dividends that could trigger withholding taxes. Each year, she prints a clear snapshot to stay on track:
Value at the start of the year
Annual contributions (typically $3,000 with the CESG)
Year-end total and rate of return
Performance comparison to the TSX and S&P 500
This gives her confidence and control without needing to rely on complicated jargon or opaque investment strategies.
Key Lessons from Jennifer’s RESP Approach
✅ RESP Advantages: Max out the CESG annually and grow funds tax-free
✅ DIY Control: Keep costs low and maintain visibility on investment choices
✅ Start Early: Leverage compounding to build significant savings by university age
✅ Review Annually: Track performance and compare to benchmarks to stay informed
✅ Avoid Complexity: A good advisor—or DIY system—should be simple enough for anyone to understand
Real-Life Insights for Physician Families and Professionals
Jennifer’s experience is a valuable reminder that good planning doesn’t need to be complicated. Whether you’re a physician, business owner, or professional parent, starting early and staying consistent with RESP contributions is one of the smartest moves you can make.
You don’t need a PhD in finance to make smart decisions—just a plan, a timeline, and a willingness to stick with it.
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