How to adjust your RESP investing strategy as your child grows Sep 3rd

A registered education savings plan (RESP) might seem like a set-it-and-forget-it account since it’s so easy to open and there’s a clear end in sight, but you’ll want to optimize your investments as your child grows. Accounts for younger children can handle more risk, while accounts that are close to the withdrawal date should be more conservative.

Here’s a quick look at how your RESP investing strategy should change over time:

Young child under 10Child to age 15Older child age 16+RESP goalStart contributing and prioritize growthBalance growth and risk Transition to a conservative investment strategyFocus areas* Open an RESP even if you can’t make the maximum contribution for the year* Get in the habit of regularly contributing to the account* Continue making contributions, with the goal of hitting the annual maximum* Evaluate your RESP and rebalance the funds to start shifting away from risky investments* Gradually reduce risky investments to favour stable investment options*  Develop an RESP withdrawal plan with the beneficiaryMindsetStart contributing to take advantage of tax-deferred growthOptimize your contributions rather than simply contributing to the accountProtect the account as the withdrawal date approaches

Ages 0 to 9: Focus on growth

Your biggest asset with an RESP is the time the funds have to grow tax-deferred, so the earlier you start investing, the better…