Unsure of what to give your loved ones? Do they seem to have it all?
Here’s how you can surprise them.
Setting up RESP for your children, grandchildren, nephew, or nieces to help them achieve higher education and their dream careers while keeping debt under control. Per Stats Canada, every second university graduates finish school in debt to the tune of $17,500 on an average, hence RESP would go a long way in assisting young adults you care about. Your children, loved ones would undertake their careers with one less financial burden on their shoulder.
There are several other benefits of RESP. The investment earns tax free income as long as the amounts invested remain in the plan. RESPs are also eligible for substantial government grants that will grow the fund significantly over time.
The sooner you develop saving habits, easier it becomes to put money away for an emergency fund or retirement. Hence, it is more important to talk about saving with your children, grandchildren at an early age. You could start with opening an account in child’s name and provide first deposit to start them on the path of savings. You could then provide a weekly or monthly allowance, some of which the child deposits in this account to save up for something that matters for them.
When your children get first job, you can commit to adding money to the savings account each month, matching the amount your children would be willing to put aside as savings. What matters most is, demonstrating your children the advantages of saving and to develop good habits that are easy to keep.
Giving a TFSA to your children is a meaningful contribution to an important life project. Whether, its for a trip abroad, a wedding, saving for down payment for their first home, TFSA is a great way to achieve a goal.
Whether Individual or Group (provided by an employer or association) TFSA has many advantages. Among other things, it grows your savings tax free and allows you to make non-taxable withdrawals anytime.
Besides savings, you can offer other financial gifts to your loved ones. Consider these examples:
If life ever throws a challenge and child is faced with a critical illness, this coverage helps to deal with without worrying for finances, helps parents if they must take time off work to care for their sick child. This policy could be assigned to the child once he reaches adulthood to protect him for the rest of his life and provide cash if the need arises.
Buying life insurance at an early age helps in many ways. You could have the policy fully paid in 10 or 20 years, no premiums to be paid thereafter while having lifelong coverage. Your children will benefit from guaranteed insurability should their state of health prevent them from purchasing life insurance in future. It’s also possible to access funds from the cash surrender value of the policy, depending on the product.
You can also bequeath gifts in honor of somebody you love or close to your heart. This could be a perfect gift to both show your support and contribute to an organization that makes a difference in the community.
Looking for advice? Contact an Insurepedia Advisor | SRK Insurance Services today to assess your goals / savings / life insurance needs and to suggest various options tailored to your specific situation.
Written by Sunil Arora (Sunny), MBA, RIBO, CAIB