As a Canadian parent in the 21st century, one of the factors you may be concerned with is how to save for your child or children’s college education. With the cost of tuition, books, room and board and other factors, post-secondary education can be expensive for a parent. However, There is a Canadian government tax-free savings plan that gives parents a way to save for their child’s post-secondary education or, in other words, any education after high school. This would include saving for college, trade schools or graduate school expenses.
Once the child is ready to use the funds, they become taxable under his or her name. However, these taxes are often extremely low due to a student’s income and tax status. If withdrawals are made to the contributions before they are needed for the child’s post-secondary education, these withdrawals are taxed free because they were invested with after-tax funds.