RESP Withdrawal
If no beneficiaries of an RESP attend school by age 21 and the RESP has been in place for at least 10 years, the subscriber can withdraw
the plan's earnings. You have to pay tax on the earnings portion at your regular marginal tax rate plus you need to pay an additional 20%
penalty tax. If you have sufficient available RRSP contribution room, you can transfer up to $50,000 of the amount withdrawn into your RRSP
or a spousal RRSP. The principal can be withdrawn tax-free.
Taxable income
Annual RESP contribution
Contribute for (years)
RESP grows for (years)
Rate of return
Amount transferred to RRSP
| Where do you live? | Alberta |
|
100,000
Taxable Income
This figure is used to calculate the tax on the RESP withdrawal and any additional CESG grant based on net family income. |
|
2,500
Annual RESP Contribution
There is no annual RESP contribution limit but there is a lifetime maximum limit of $50,000.
Input Error:
Annual RESP Contribution You have exceeded the $50,000 maximum lifetime limit by . Enter a lower Annual RESP contribution amount, or decrease the number of contribution years. |
|
18
Input Error: Contribute for (years)
Enter a value between 1 and 31. |
|
25
Input Error: Grows for (years)
Enter a value between 1 and 36. |
|
4.00%
Input Error: Rate of return
Enter a value between and %. |
|
25,000
RRSP Transfer
The maximum amount you can transfer to an RRSP is $50,000. |
RESP Withdrawal Breakdown
|
| After-Tax Earnings | ||
| RESP value (with CESG) | $102,699 | |
| Less: Principal repaid to subscriber | -$45,000 | |
| Less: CESG repaid to government | -$7,200 | |
| Equals RESP earnings | $50,499 | |
| Less: Amount transferred to RRSP | $27,000 | |
| Equals Taxable earnings | A | $23,499 |
| Less: Regular tax (% of taxable earnings) | $10,201 | |
| Less: Penalty tax (20.00% of taxable earnings) | $4,700 | |
| Equals Total tax (% of taxable earnings) | B | $14,901 |
| After-tax earnings (% of A) | (A - B) | $8,598 |
Assumptions
Annual RESP contributions are made at the start of each year. Calculations include the basic CESG (20%) and the additional CESG that is based on net family income. Family income is assumed to stay the same throughout the time period. Provincial grants are not included in the calculations. The maximum lifetime CESG grant you can receive is $7,200. Calculations use marginal tax rates as of January 2020.
Disclaimer
Annual RESP contributions are made at the start of each year. Calculations include the basic CESG (20%) and the additional CESG that is based on net family income. Family income is assumed to stay the same throughout the time period. Provincial grants are not included in the calculations. The maximum lifetime CESG grant you can receive is $7,200. Calculations use marginal tax rates as of January 2020.
Disclaimer
