Why Traditional Education Savings Plans May Be Holding Families Back

Why Traditional Education Savings Plans May Be Holding Families Back

Most Canadian parents are told early on: “Start an RESP to save for your child’s education.” It’s sound advice… until it isn’t.

Because while traditional Registered Education Savings Plans (RESPs) do offer government grants and tax-sheltered growth, they come with limitations — ones many families don’t discover until it’s too late.

The truth? A traditional RESP might not be the most flexible or future-proof option for your child. Let’s explore why — and what a modern alternative like the Legacy & Education Savings Plan (LESP) can do differently.

1. They’re Designed for a Single Outcome

RESPs are education-only. If your child decides not to go to post-secondary school, the plan loses much of its value:

• Unused government grants are often clawed back

• You may face tax penalties on earnings

• Funds can’t be repurposed for other goals (like a home or business)

In contrast, LESP offers total flexibility. Whether your child chooses college, entrepreneurship, travel, or something unexpected, your plan supports their path — not just the “expected” one.

2. RESPs Don’t Offer Financial Protection

RESPs are savings plans, plain and simple. If something were to happen to the parent or guardian funding the plan, those contributions stop — and the plan stalls.

LESP includes a built-in protection component. That means if the unexpected happens, the plan continues to grow and your child’s future remains secure. It’s peace of mind that RESP simply can’t provide.

3. You Miss Out on Long-Term, Generational Growth

RESPs are temporary tools. They’re designed to be used up over a few years, usually between ages 18–25. Once the funds are withdrawn, the plan is closed.

LESP is structured for long-term, multi-decade growth — often staying in place well beyond childhood. It’s not just a short-term savings account, but a plan that builds wealth, stability, and even a legacy across generations.

4. They Don’t Teach Financial Flexibility

By locking funds into one outcome, RESPs send an unspoken message: “There’s one path to success.” But every child is different. Some will thrive in traditional classrooms. Others will build businesses, create, travel, or forge their own path.

LESP shows your child that their dreams are valid, whatever they look like — and that you’re willing to support them financially in reaching those goals.

Final Thoughts: Time for a Smarter Approach?

Traditional RESPs aren’t wrong — they’re just limited. And today’s families want more than limitations. They want flexibility, protection, and growth — all wrapped in love and smart planning.

That’s exactly what LESP delivers.

Book a free, no-pressure consultation with a Smart Start Advisor and find out how LESP can help you plan for more than just school — but for everything your child might grow up to become.