RESP funds? Smooth withdrawals start with early planning.
You've saved diligently for your child's education with a Registered Education Savings Plan. But when the time comes, do you know how best to access the funds?
SMART sPENDING
BY Tamara Young
June 2025
While parents with kids of all ages will tell you they have an RESP for their child's education, they may struggle to tell you exactly how they plan to withdraw those funds for post-secondary schooling. We spoke with Tannis Dawson, High Net Worth Planner, TD Wealth, about how parents can prepare. Here's some of what she told us:
Withdraw the EAP first
IMAGE: veronica park
"If you're a full-time student, you're allowed to withdraw up to $8,000 in the first 13 weeks," says Dawson. "After 13 weeks, it's typically unlimited, but most programs and plans will allow a maximum of $25,000 before they begin asking for receipts." Part-time students may withdraw up to $4,000 in the same time period.
While Dawson says capital may be withdrawn as well, she strongly suggests your child's Education Assistance Payments (EAP) be withdrawn first. EAP is the portion of the RESP comprised of government-sponsored saving incentives like the Canada Education Savings Grant, as well as any earnings made on your contributions. Unlike your personal contributions to the plan, any unspent EAP savings will be forfeited at the end of your child's schooling. That's why it's so important to prioritize withdrawing these first.
To learn more about how to calculate EAP withdrawals, watch the full interview below.
Disclaimer
The person who establishes the RESP is known as the subscriber. Until the RESP funds are distributed to the student (the beneficiary), the funds belong to the subscriber (typically the parent). If the subscriber dies before the RESP can be used, failing to name a successor subscriber could entangle the funds in the estate distribution process and result in delays.
RESP: Secure student funding by naming a successor
Start thinking about it early
The information contained herein has been provided by TD Wealth and is for information purposes only. The information has been drawn from sources believed to be reliable. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual's objectives and risk tolerance. TD Wealth represents the products and services offered by TD Waterhouse Canada Inc., TD Waterhouse Private Investment Counsel Inc., TD Wealth Private Banking (offered by The Toronto-Dominion Bank) and TD Wealth Private Trust (offered by The Canada Trust Company). TD Wealth Private Wealth Management represents the products and services available through TD Wealth Private Investment Advice (a division of TD Waterhouse Canada Inc.), TD Wealth Private Investment Counsel (offered by TD Waterhouse Private Investment Counsel Inc.), TD Wealth Private Banking (offered by The Toronto-Dominion Bank) and TD Wealth Private Trust (offered by The Canada Trust Company). ®The TD logo and other TD trademarks are the property of The Toronto-Dominion Bank or its subsidiaries.
According to Dawson, parents should begin preparing well before the first day of post-secondary classes: "Even a year in advance, parents should be confirming a portion of their RESP savings are in cash." Dawson also encourages parents to verify they've met the withdrawal eligibility requirements ahead of time. This includes:
With a TFSA, you can name either a successor holder or a beneficiary:
Confirming the post-secondary institution is on the list maintained by Employment and Social Development Canada for eligibility
Ensuring the program your child is enrolled in meets the program length requirements
Procuring a letter from the university/college that provides proof of enrollment Filling out an RESP withdrawal request form (your financial institution can help you with this)
Although the income portion of your child's RESP — the grant and any income earned — is considered taxable, the tax impact can be minimal when the student withdraws the funds. Students often have very little income and the tax burden is therefore typically low, even on the taxable portion of the benefit. Capital payments, or withdrawals consisting of prior contributions, are tax-free.
"To maximize the benefit of an RESP, you'll want to plan ahead and make sure you're considering the entire four years, or however long you expect your child to be in school," says Dawson.
Consider the tax
High Net Worth Planner,
TD Wealth
Tannis Dawson
To maximize the benefit of an RESP, you'll want to plan ahead and make sure you're considering the entire four years, or however long you expect your child to be in school.
Ready for an RESP withdrawal? Key steps to remember
"If you're a full-time student, you're allowed to withdraw up to $8,000 in the first 13 weeks," says Dawson. "After 13 weeks, it's typically unlimited, but most programs and plans will allow a maximum of $25,000 before they begin asking for receipts." Part-time students may withdraw up to $4,000 in the same time period.
While Dawson says capital may be withdrawn as well, she strongly suggests your child's Education Assistance Payments (EAP) be withdrawn first. EAP is the portion of the RESP comprised of government-sponsored saving incentives like the Canada Education Savings Grant, as well as any earnings made on your contributions. Unlike your personal contributions to the plan, any unspent EAP savings will be forfeited at the end of your child's schooling. That's why it's so important to prioritize withdrawing these first.
To learn more about how to calculate EAP withdrawals, watch the full interview below.
Withdraw the EAP first
Business Succession Advisor, TD Wealth
Pierre Létourneau
Basically, anytime you need to gauge how your company is doing, a business valuation becomes necessary
While you’re answering those questions, think about what you truly enjoy and whether you could see yourself doing more of it. But also consider what you'd do if things don’t go to plan.
Where would you find health-related assistance if you needed it? Would you move in with family or hire a live-in caregiver?
Here's something else to consider: You may not want to wait until retirement to try out some of these lifestyle changes. Travelling for months on end or taking a multi-year RV trip may sound great right now, but before you invest in a camper, you may want to consider taking shorter ventures to see if it’s actually a lifestyle you enjoy, says Ewing.
Include friends and family in your thought process, as well. “You might want to better understand their goals, too,” she says. “Are your plans tied to theirs?” For instance, if your mission statement highlights the value of time with family and friends, make sure they are not planning to relocate. On a similar note, if you’re considering buying a place in Mexico to be near friends, you might want to confirm they intend to stick around for a few years.
“At the same time, don’t get too anchored in someone else’s vision of the future," says Ewing. "Know whether you need to expand your thinking or consider other possibilities." This applies to your partner, too. As important as it is to have a shared vision as a couple, recognize you may also have different interests.
Business Succession Advisor,
TD Wealth
Pierre Létourneau
Basically, anytime you need to gauge how your company is doing, a business valuation becomes necessary
The information contained herein has been provided by TD Wealth and is for information purposes only. The information has been drawn from sources believed to be reliable. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual's objectives and risk tolerance.
TD Wealth represents the products and services offered by TD Waterhouse Canada Inc., TD Waterhouse Private Investment Counsel Inc., TD Wealth Private Banking (offered by The Toronto-Dominion Bank) and TD Wealth Private Trust (offered by The Canada Trust Company).
TD Wealth Private Wealth Management represents the products and services available through TD Wealth Private Investment Advice (a division of TD Waterhouse Canada Inc.), TD Wealth Private Investment Counsel (offered by TD Waterhouse Private Investment Counsel Inc.), TD Wealth Private Banking (offered by The Toronto-Dominion Bank) and TD Wealth Private Trust (offered by The Canada Trust Company).
®The TD logo and other TD trademarks are the property of The Toronto-Dominion Bank or its subsidiaries.
Disclaimer
Consider the tax