Weekly Blog Round: RESP Planning

RESP PlanningBefore I discuss the current RESP planning process I am going through, I would like to highlight to all my readers that I share all my stock trades through my newsletter. So far this year, I have done 4 trades starting with my annual January TFSA contribution.

Here are a couple of stock trade newsletters to give you an idea. I am always happy to tune the content, please let me know if there are more information on the trades you would like to see.

My intention is to continue and provide that unique content through my newsletter. In the coming weeks, I will be disclosing my future stock purchases in my RESP account. Sign up now and you won’t miss my trades.

The newsletter is free, you get around 1 email per month reviewing finances and investing topics. I always get emails from readers on how they appreciate the content as it’s pertinent and helpful.

RESP Planning

I am going to reserve a bigger post for this but I am currently consolidating all my kids RESP accounts under RBC. It’s the last set of accounts to consolidate under RBC and it’s also the last set of accounts with mutual funds. My planning is basically trying to figure out what to hold in the account from a stock, ETFs, or bond perspective considering the timeline is quite different from retirement. Let’s just say that I only have 10 years left and I am not happy with the past performance πŸ™

Readers, do you have an investing plan for your kids RESP? What do you hold?

Worthy Readings

Some weekend reading to share …


Here are the carnivals I was present in the last 2 weeks highlighting a couple of posts I wrote

Have a nice weekend!

Image:Β FreeDigitalPhotos.net

14 Responses to "Weekly Blog Round: RESP Planning"

  1. My daughters are 2 and 5 months. I have their RESPs invested in TD e-series with 40% in the Canadian Index, 25% in the US Index, 25% in the International Index, and 10% in the Canadian bond index. So far, it has been performing really well, and the MER of 0.3% doesn’t hurt either πŸ™‚

    1. The Passive Income Earner · Edit


      Thanks for sharing. I am worried that with 10 years or so remaining for me that indexing might be difficult to get the expected performance I want. I am inclined to pick income generating stocks such as REITs. I am also not settled on my bond ratio. Do you have a plan to adjust your bond ratio over the next 20 years?

      By the way, well done on being setup early and to have a plan.

      1. What I detailed earlier is my plan from 0-9

        From 10-13 I plan on doing 30% CDN Index, 15% US Index, 15% Int’l Index, and 40% Bond Index

        From 14-17 I plan on doing 20% CDN Index, 10% US Index, 35% Bond Index, and 35% GIC’s

        From 18-21 it would be 20% money market, 70% GIC’s and 10% Bond Index. I would sell 20-25% of GIC’s every year afterwards to place into the money market for schooling expenses.

        1. I probably should have specified that the bond index would be the TD e-Series one. I’m going to wait until the girls are older before I decide which GICs I’m going to buy.

  2. Hey PIE,

    Thanks for the mention. I’m looking forward to your bigger post on your RESP consolidation with RBC. Do you have any info on contributing to other family member’s RESP (ie: how I might contribute to my nieces’ RESPs). I know it’s possible but I haven’t looked into it yet.

    Have a great weekend!

    1. The Passive Income Earner · Edit


      I don’t per say have a list maintained on the blog. I just mention it on the newsletter. In my next one, I’ll mention them as a recap. I will be doing some trades in the coming weeks so now is a good time to sign up πŸ™‚

  3. My RESP account is set-up similar to Nathan’s. TD e-series funds, with 1/3 each in Canadian Index, US Index and International Index. I was going to do 1/4 for everything, including Canadian Bonds, but like you I’m not sure what to do with the bond component.

    I’m not planning for big returns; I’d be happy with 4-5% over the duration.

    If you’re concerned about your returns, I’d be more inclined to increase contributions than chase yield through stocks and REITs. You get an automatic 20% return on your contributions up to $2,500 a year. Pretty tough to beat that.

    1. The Passive Income Earner · Edit


      Thanks for sharing. I tend to prefer knowing and understanding the possible growth over leaving it up to the market. That’s why I am a dividend investor first and index second. However, the horizon I have remaining is short (10 years) and I am not sure if index investing is worth it for the horizon. I started looking at that and will share my thoughts.

      I maximize my contribution for both children so I am covered with the 20%. I do want my money to work for me, that’s why I am looking at the alternatives. I have 4 stocks in mind that I will share later on. I hear you on chasing the yield and that’s not my intention. I don’t consider a REIT as chasing the yield compared with some other high yield but not sustainable investments (YLO :))

      What I do want is bond. I will probably settle on a bond ETF but I am not sure how much. I want to be able to rebalance.

      Do you want 4-5% annually or just over the 20 something years? I am asking because it means it doesn’t keep with inflation.

      I appreciate the discussion as I find the planning to be different from a long term retirement plan.

      1. @PIE – Makes sense. I wasn’t sure if you were maxing out your contributions or not, so I thought I’d mention that.

        I am a dividend investor first as well, but I agree that the planning is much different with the RESP than with my RRSP/TFSA.

        I meant 4-5% annually, not total. Otherwise I might as well have stayed with term deposits πŸ™‚

  4. Hi PIE,
    Just started reading your blog this week, as I’m interested in learnng about direct stock investing.
    I have 2 kids, ages 7 and 9. Have been making monthly RESP contributions of $500 in a RBC family plan since the kids were 6 months and 2yrs. All in RBC Canadian Dividend fund. Now that we’re roughly 9 years away from the first kid starting university, I’ve been wondering if we should start redirecting the monthly contributions to fixed income investments.

    Looking forwarding to reading your longer post.


  5. For the bond component, take a look at Pimco Monthly Income. PMO005 is a no-load mutual fund (no cost to buy or sell) with a fairly low MER. I own this fund in a number of accounts and am very happy with the YTD return (which is close to 20%) It pays a nIce monthly dividend too. I also own the US $ version (PMO1005) as it is a great way to save US dollars.

  6. Thanks for the mention.

    Even though we don’t have kids, I look forward to reading any future posts about the RESP – unfortunately I don’t have any advice for you on that account. Seems every parent has a different plan of attack for that one πŸ™‚

    All the best,

    1. The Passive Income Earner · Edit


      Thanks for your comment and continuous support! It seems to me most people go and apply the RRSP planning when starting with a 20 year window but the time compresses much more quickly and brings it what one should do when nearing retirement much quicker. This is where I feel I need a different strategy because 10 years to grow, 5 to transition and 5 to sustain is not much to benefit from some investing strategies. That’s what I want to look at.


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