By iA Private Wealth, September 07, 2021
Having a child is an exciting time in life. Before the baby arrives, it’s useful to think about your finances, since raising a child can be both incredibly rewarding and very expensive.
Funding your family addition
Clearly, the more money you can put away, the better your financial situation will be when baby enters the picture. You don’t have to do it all on your own, however. Family and friends might be able to help with gifts, babysitting and hand-me-downs, plus you may qualify for government support.
|Maternity (for the person giving birth)
|up to 15 weeks
|up to $595
|up to 40 weeks, but one parent cannot receive more than 35 weeks of standard benefits
|up to $595
|up to 69 weeks, but one parent cannot receive more than 61 weeks of extended benefits
|up to $357
Canada Child Benefit (CCB)
In addition to EI benefits, your family may qualify for the CCB. Payments are based on your adjusted family net income (AFNI) for the previous tax year. For the 2021 benefit period (July 2021 to June 2022), if your family’s AFNI is below $32,028, you qualify for the maximum regular CCB of $6,833 per year for children under six years old, and $5,765 annually for children between six and 17 years old. The maximum benefit gradually decreases for AFNIs above $32,028.
Registered Education Savings Plan (RESP)
The cost of post-secondary education continues to rise. It’s good to consider an RESP, which is a savings and investing program designed to cover some of these costs. Currently, the lifetime RESP contribution limit is $50,000 per student (beneficiary). You may invest in many types of securities, from mutual funds and stocks to bonds and GICs – and the investment growth compounds, tax deferred, until the RESP beneficiary begins withdrawing assets.
As an incentive to save, the federal government offers the Canadian Education Savings Grant that matches up to 20% of your contributions, to an annual maximum of $500 and lifetime limit of $7,200.
Other things to consider
iA Private Wealth can help you financially prepare for your new arrival. Start by contacting your local iA Private Wealth Investment Advisor today.This article is a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.