RESP or RRSP? With qualified information and creativity, it is possible to utilize both!

By Natalia Payne Sarti,
RESP Specialist licensed by RESPDAC & LLQP in Ontario.

Many individuals come to realize that adulthood brings about greater responsibilities, especially when it comes to financial planning for the family’s future. The challenge is to establish a financial framework that allows for a comfortable present lifestyle, provides for children’s future opportunities, and ensures financial security during retirement. Fortunately, in Canada, the government offers Registered Plans designed to help investments grow in value while providing tax benefits and incentives.

Illustrative image of a young couple with their daughter (Photo:

RESP and RRSP plans are essentially government-registered and regulated investment vehicles. Despite sharing common tax benefits, each has unique features and specific purposes. With the right information, expert guidance, and a touch of creativity, it becomes more manageable to strike a balance between these two investment options. In this article, we’ll explore some potential alternatives and scenarios.

  1. Contributing to your RRSP can lead to a tax refund, which, when directed towards annual RESP contributions, allows you to reap the benefits of both plans.
  2. Developing a consistent and regulated contribution schedule, even with modest amounts, can yield significant long-term results. Utilizing part of the Child Care Benefit, if it fits within your budget, can be a smart strategy to leverage government programs for additional benefits.
  3. Consider fully contributing to the RESP, adhering to the maximum limits allowed, and upon the beneficiary’s commencement of post-secondary studies, redirect the family’s accumulated funds towards the RRSP for investment (assuming there is available contribution room).

Ultimately, the most important aspect of preparing for your personal and family priorities is making decisions that align with your specific financial goals and circumstances.