The Plan by Investors Group^TM

It’s never too late to return to the classroom
Post-secondary education isn’t just for the young anymore

When you said, “no more teachers, no more books,” you might have spoken too soon. An ever-growing number of baby boomers are returning to the classroom and proving that in this era when people are living longer, healthier and more active lives, it’s never too late to get an education.

Some want to broaden their knowledge and build new skills, while others are inspired by a desire to explore new interests, build friendships or pursue a long-held dream.

Whatever the reason behind the return is, education has a price tag. Whether they’re 25 or 55, all students need to consider how they are going to finance their education.

Registered Education Savings Plans (RESPs) are a great way to save for a child’s education, but they’re not just for children. People of any age can benefit from the opportunity that RESPs offer to defer tax on the growth. You are not taxed on the growth in your investment until it is withdrawn. If your income is reduced while you’re attending school, you may be subject to a lower tax rate. However, “older” RESP holders will not receive the added benefit of government grants that are available only to younger RESP beneficiaries.

If your decision to return to the classroom won’t allow you the luxury of time to implement a savings plan, tapping into non-registered investments like GICs or savings bonds may be an alternative worth considering. Since you’ve probably already paid tax on these investments, you likely won’t be subject to any further taxes when they’re withdrawn.

Your RRSPs also may be a way to cover the costs of your studies. Through the Lifelong Learning Plan (LLP), you can withdraw up to $20,000 for you, your spouse or your common law partner to help finance educational goals. You do not have to pay tax on the amount withdrawn, if the money is repaid over a period of up to 10 years. Also, to be eligible for the LLP, you must be: a full-time student (or a part-time student, if you meet the disability conditions), a resident of Canada, enrolled in a qualifying educational program at a designated educational institution, and have completed your participation in the program before the end of the year you reach the age of 69. (Recent budget proposals would allow you to continue your participation until the end of the year in which you reach the age of 71.)

If you're thinking of joining the “booming” trend to education in retirement, remember that your plan needs to include a way to pay for it. We can help you explore the options for achieving your educational dreams.

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This article, written and published by Investors Group Financial Services Inc., is presented as a general source of information only and is not intended as a solicitation to buy or sell investments, nor is it intended to provide professional advice including, without limitation, investment, financial, legal, accounting or tax advice. For more information on this topic or on any other investment or financial matters, please contact your Investors Group Consultant.