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How Grandparents can do more financially to help their Grandchildren

How Grandparents can do more financially to help their Grandchildren


Many grandparents are assisting with some of the big expenses and sometimes bypassing adult children to leave inherited assets to grandchildren instead.

Helping grandchildren may start by contributing to their Registered Education Savings Plans.  The maximum contribution is $2,500.00/year.  The government grant matches 20% of the annual $2,500.00 contribution.

Another option is to start contributing annually to a TFSA once your grandchildren are age 18.  If your grandchild is age 18, grandparents could contribute to the FHSA First Home Saving Account and can have contributions up to $40,000.00 with an annual contribution of $8,000.00 per year.  Similar to the TFSA, any gains on the investment grow tax free as long as they are eventually used to buy a qualifying home.  The FHSA will help our grandchildren break into the housing market.

Purchasing life insurance on grandchildren provides them with a financial asset to build upon and a baseline of insurability for the future.  Life insurance cash values grow tax sheltered and many provide another opportunity to create wealth in a tax sheltered and efficient manner and provide your grandchild with a life insurance policy to build upon over time without the need to provide evidence of insurability in the future.

These are just a few of the financial tools available to help our grandchildren achieve future financial stability.

Talk to your financial advisor. Get in touch.

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