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Savings plan for kids wedding with government matching
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amother
Pumpkin


 

Post Tue, Jul 14 2020, 10:58 am
teachkids wrote:
Just note. In the US, most education savings plans can only be used for education. I have a friend who had one of these, but couldn’t even use it for her rent because she lived off campus (she had a full scholarship for tuition itself).


Depends. I would check. Usually a 529 plan can go to rent if the child is a full time student. Also, if she's getting a full scholarship, you can get a letter from the school stating the amount of the scholarship, and you can withdraw that without penalties, though you will pay tax.
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amother
Slateblue


 

Post Sat, Aug 01 2020, 11:42 pm
amother [ Purple ] wrote:
It's intended to support your child's education after high school. You can use it to pay for anything you want (books, clothes, rent, travel expenses etc.). Any girl in seminary or boy in yeshiva can cash out when they turn 18 and use the money as they please. You are in no way obligated to use more than a fraction of it for education-related costs. It is perfectly above-board and legal to spend the money on a wedding.



Seems like a classic socialist program. Government uses their "free" (tax payer) money on the pretense of helping for college, and it's legal to use a small fraction for an education related cost and use the rest on a nice wedding!

Isn't socialism awesome? The government pays for your wedding.

I have an idea. I'm sure nobody thought of it. My question is why don't we improve this wonderful policy even more by instead of the government only matching the money put aside for education, why not have the government double or triple the money? The money is free anyway and this way the new couple can buy a car after their wedding paid for by the government. I'm surprised some are still against socialism.
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amother
Purple


 

Post Sat, Aug 01 2020, 11:51 pm
amother [ Slateblue ] wrote:
Seems like a classic socialist program. Government uses their "free" (tax payer) money on the pretense of helping for college, and it's legal to use a small fraction for an education related cost and use the rest on a nice wedding!

Isn't socialism awesome? The government pays for your wedding.

I have an idea. I'm sure nobody thought of it. My question is why don't we improve this wonderful policy even more by instead of the government only matching the money put aside for education, why not have the government double or triple the money? The money is free anyway and this way the new couple can buy a car after their wedding paid for by the government. I'm surprised some are still against socialism.


It's actually the opposite of what you describe.

The government created an incentive for parents to save for their child's future.
The RESP is a savings vehicle that encourages parents to save by matching the funds for the first 8 years. The parents are still saving way more than the amount the government is chipping in.

The result?
Canada is the most educated country in the world. More than 56% of adults have some form of post-high school education. This had a tremendous positive impact on the economic and societal wellbeing of the country.

Which is a better business plan?
Invest 8000$ per child over a period of 8 years , or give young adults student loans that will burden them for life?
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amother
Ruby


 

Post Sat, Aug 01 2020, 11:59 pm
What if you’re a Canadian citizen but your kids are born and raised in U.S.
can you get this benefit?
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amother
Purple


 

Post Sun, Aug 02 2020, 12:03 am
amother [ Ruby ] wrote:
What if you’re a Canadian citizen but your kids are born and raised in U.S.
can you get this benefit?


I don't know, but I found this when I googled:
"The Canada Revenue Agency (CRA) determines an individual's residency status for tax purposes. A beneficiary of an RESP must be a resident of Canada at the time contributions are made to the plan, however, a beneficiary of an RESP can study outside Canada and still be considered a Canadian resident." Oct 27, 2011
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Frumwithallergies




 
 
    
 

Post Sun, Aug 02 2020, 12:03 am
amother [ Ruby ] wrote:
What if you’re a Canadian citizen but your kids are born and raised in U.S.
can you get this benefit?


Nope
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amother
Ruby


 

Post Sun, Aug 02 2020, 12:06 am
Are U sure, I get the impression people do that...
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amother
Slateblue


 

Post Sun, Aug 02 2020, 12:11 am
amother [ Purple ] wrote:
It's actually the opposite of what you describe.

The government created an incentive for parents to save for their child's future.
The RESP is a savings vehicle that encourages parents to save by matching the funds for the first 8 years. The parents are still saving way more than the amount the government is chipping in.

The result?
Canada is the most educated country in the world. More than 56% of adults have some form of post-high school education. This had a tremendous positive impact on the economic and societal wellbeing of the country.

Which is a better business plan?
Invest 8000$ per child over a period of 8 years , or give young adults student loans that will burden them for life?



We can debate about whether it's fair if you or I should pay for someone else's college education. Government matching is essentially just that. But posters on this thread say that only a small fraction needs to actually be used for education. The rest can be used to make a nice wedding. That means that you and I are paying for someone else's wedding.

Does this make sense to you?
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amother
Purple


 

Post Sun, Aug 02 2020, 12:29 am
amother [ Slateblue ] wrote:
We can debate about whether it's fair if you or I should pay for someone else's college education. Government matching is essentially just that. But posters on this thread say that only a small fraction needs to actually be used for education. The rest can be used to make a nice wedding. That means that you and I are paying for someone else's wedding.

Does this make sense to you?


You and I are paying an incentive to encourage parents to save for their child's future.
Without the incentive, many families would not be motivated or disciplined enough to save.
By investing 8000$ in early childhood, we as a society reap the benefits of our investment when the child is provided for in early adulthood.
The average parent invests 30 000$ into their RESP over the course of their child's first 18 years.
The government's contribution of 8000$ is a worthwhile investment that ensures the stability and financial security of youth on the cusp of adulthood.
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amother
Purple


 

Post Sun, Aug 02 2020, 12:41 am
For the Americans on here who are resistant to this concept:
Imagine if large numbers of poor and disadvantaged families (or single parents) in the US received a mini workshop on the importance of saving for their child's future in the hospital after the birth of their child.
They go home with a brochure that contains the necessary information in order to start an RESP for their child.
They are motivated to start because of the incentive.
They pay in for the first 8 years and continue even once the incentive is no longer there because they get into the rhythm of it.
The child grows up knowing that their parent is saving for their future education. It is mentioned in conversations and sometimes used to encourage them to try harder in school.
As they near their 18th birthday, the child and his parents begin planning how best to use the money.

Can you imagine the incredible positive change such a program would bring?
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amother
Mistyrose


 

Post Sun, Aug 02 2020, 12:45 am
amother [ Purple ] wrote:
For the Americans on here who are resistant to this concept:
Imagine if large numbers of poor and disadvantaged families (or single parents) in the US received a mini workshop on the importance of saving for their child's future in the hospital after the birth of their child.
They go home with a brochure that contains the necessary information in order to start an RESP for their child.
They are motivated to start because of the incentive.
They pay in for the first 8 years and continue even once the incentive is no longer there because they get into the rhythm of it.
The child grows up knowing that their parent is saving for their future education. It is mentioned in conversations and sometimes used to encourage them to try harder in school.
As they near their 18th birthday, the child and his parents begin planning how best to use the money.

Can you imagine the incredible positive change such a program would bring?


Yes. It would be abused but at least the people that would really want to educate themselves and use it for education would be able to.

I would love to go to medical school but I think about the expenses and I cringe.
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