MAP 4C
Unit 7
7.5 Saving for Education and Retirement
Post-secondary education and retirement typically involve large sums of money. The
Canadian government offers Registered Education Savings Plans (RESPs) and
(Registered Retirement Savings Plans (RRSPs) and Tax Free Savings Accounts
(TFSA) to encourage Canadians to save for these goals.
Use the internet and the key words to help you find the following information.
Then use your OWN WORDS to answer the following questions.
Key Search Words
 Canada Revenue Agency
1. Gathering information about RESPs
RESPs RRSPs
 Research background information
 Human Resources
a) What is an RESP?
Canada RESPs
b) What are the benefits of saving money in an RESP?
 RESPs and RRSPs
c) Where can you open an RESP?
explained
d) What is a qualifying educational program?
e) What tax rules apply to an RESP?
 Research contribution rules
f) Who can contribute to an RESP?
g) What is the maximum lifetime contribution allowed?
h) How much money does the government contribute to an RESP?
 Research withdrawal rules
i) How is money withdrawn from an RESP when the student starts postsecondary education?
j) What happens to the money in the RESP if the student decides not to
pursue post-secondary education?
2. Gathering information about RRSPs and RIFs
 Research background information
a) What is an RRSP?
b) What are the benefits of saving money in an RRSP?
c) Where can you open an RRSP?
d) What tax rules apply to an RRSP?
 Research contribution rules
e) Who can contribute to an RRSP?
f) How often and how much can a person contribute to an RRSP?
g) For how long can a person contribute to an RRSP?
 Research withdrawal rules
h) What happens when a person needs some of the money saved in an
RRSP for an emergency?
i) What do you do with the money in an RRSP when you retire?
j) What is the difference between an RRSP and a Retirement Income
Fund (RIF)?
3. Gathering information about TFSAs
 Research background information
a) What is a TFSA?
b) What are the benefits of saving money in a TFSA?
c) Where can you open a TFSA?
d) What tax rules apply to a TFSA?
 Research contribution rules
e) Who can contribute to a TFSA?
f) What is the maximum contribution allowed?
 Research withdrawal rules
g) When can money be withdrawn from a TFSA?
h) Are there any restrictions on the amount withdrawn?
i) Are there any restrictions on what the money is used for or why it is
being withdrawn?
4. Using online financial calculators
Many financial institutions offer online RESP, RRSP, and RIF calculators.
 Find and RESP calculator, the following may be used:
(http://www.getsmarteraboutmoney.ca/tools-and-calculators/resp-calculator/)
a) What information does the calculator require?
 Find and RRSP calculator, the following may be used:
http://www.oecu.on.ca/tools/rrsptax_calc.htm
b) Think of the largest contribution you can afford to make every
month from age 18 to age 65. What will be the amount of these
contributions when you retire? Use realistic interest rates
(between 2-4%) and record what you see.
c) Investigate and record how the amount at retirement changes if
you:
i)
Double your contributions
ii)
Wait 10 years until you start contributing