Age of children
The current age of your children. The difference between their current age and the age they start college is the number of years you have to save. Note that there can be restrictions on the amount of grant available and participation in an RESP for children 16 or older.
Age to start education
The age your child will begin post-secondary education. The default is 18, but this can be any age up to 25.
Current estimated cost of one year of tuition and books. This amount should be per child and be specific to the school and program they may be interested in attending. For the purposes of this calculator all expenses are assumed to be due at the end of the year.
Room and board
The current estimated cost of one-year room and board. Like tuition and books, this amount should be per child and specific to the school they may be interested in attending. For the purposes of this calculator, all expenses are assumed to be due at the end of the year.
Education cost inflation
This is the percentage that you expect educational costs to increase per year. The annual education inflation is approximately 3.3% (source: Statistics Canada 2018 - 2019 Academic year).
The total amount you currently have saved for your children's education.
The dollar amount you plan to save per month toward your children's education. All amounts are assumed to be added to your account at the beginning of the month.
Rate of return
This is the annually compounded rate of return you expect from your investments. This will also be the rate used if you end up with a negative balance and need to borrow money to meet your goal. The actual rate of return is largely dependent on the type of investments you select. For example, the annual return of the S&P/TSX Composite Index for the 10 year period from December 31, 2009 through December 31, 2019 was 3.9% (source spindices.com). Over the same period the total annual return (including dividends) was 6.9% (source spindices.com). Savings accounts at a bank or credit union may pay as little as 2% or less. It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment.
Registered Education Savings Plan (RESP)
Check this box if you wish to calculate your savings with a Registered Education Savings Plan (RESP). There are two advantages to using an RESP to save for your children's education. First, the money grows tax free until the child needs it for tuition, residence and other educational expenses. Second, you receive a Canada Education Savings Grant worth as much as $600 per year per child. The grant amounts for 2019 are calculated as follows: