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Start Saving Now for September: Your RESP Checklist Before the School Year Hits

  Canadian Money Brief · Family Finance September feels a long way off on July 1. That's exactly why now is the right time to look at your child's RESP — not in late August when the school supply list arrives and the grant math gets rushed. If you have a Registered Education Savings Plan (or you've been meaning to open one), here's what to check right now, and why the calendar year — not the school year — is what actually matters. Why July, Not August The Canada Education Savings Grant (CESG) — the government's 20% match on RESP contributions — runs on the calendar year , not the school year. Grant room for 2026 resets on a January-to-December basis, and it doesn't carry any special "back to school" deadline. But summer is genuinely the best time to check your numbers, for three reasons: You still have six full months left in the year to top up if you're behind. Contributions made now have more time to grow before your child needs the money. You av...
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Annuities and Interest Rates: What You Need to Know

 

Annuities are financial products that provide a stream of income for a certain period of time, usually for the rest of your life. They can be a useful way to supplement your retirement income, especially if you are worried about outliving your savings. However, annuities are also affected by interest rates, which can influence their cost and benefits. Here are some factors to consider before buying an annuity in a high interest rate environment.

First, you need to understand how interest rates affect annuities. Generally speaking, when interest rates are high, annuities are cheaper to buy, because the insurance company can invest your money at a higher return and pay you more income. Conversely, when interest rates are low, annuities are more expensive to buy, because the insurance company has to invest your money at a lower return and pay you less income.

Second, you need to consider the type of annuity you want to buy. There are two main types of annuities: fixed and variable. Fixed annuities pay you a fixed amount of income every month, regardless of market conditions. Variable annuities pay you a variable amount of income every month, depending on the performance of the underlying investments. Fixed annuities are more sensitive to interest rate changes, because they lock in the current rate for the duration of the contract. Variable annuities are less sensitive to interest rate changes, because they adjust to the market performance over time.

Third, you need to weigh the pros and cons of buying an annuity in a high interest rate environment. On the one hand, buying an annuity when interest rates are high can give you a higher income for life, which can help you cope with inflation and rising expenses. On the other hand, buying an annuity when interest rates are high can also mean that you miss out on potential growth opportunities in other investments, such as stocks and bonds, which may offer higher returns in the long run.

Ultimately, the decision to buy an annuity depends on your personal goals, risk tolerance, and financial situation. You should consult a qualified financial advisor before making any major financial decisions. Annuities can be a valuable part of your retirement plan, but they are not for everyone. You should carefully evaluate your options and compare different products before buying an annuity.

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