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Education savings

Whether and how you save for your child's education. Some countries match your savings: in Canada a registered education savings plan (RESP) earns a government grant, and in the US a 529 plan grows tax-free for education costs.

Should we start saving for our child's education?

In short: Parents choose between 4 main approaches: None, pay from income later; Capture the full government match; Maximize tax-sheltered saving; Save in the parents' names. Evidence: your call. No outcome evidence picks a winner. Preference, culture, money and logistics decide. Best settled: 0–6 months.

Evidence
Your call
Best settled
0–6 months
Part of
The family system

Education savings: what are the options?

Parents usually land on one of these 4 approaches.

  1. 1. None, pay from income later

    You do not save now and pay from earnings when the time comes.

  2. 2. Capture the full government match

    You put in enough to get all the government grant money on offer.

  3. 3. Maximize tax-sheltered saving

    You put in as much as the tax-advantaged account allows.

  4. 4. Save in the parents' names

    You save in your own accounts, keeping control of how it is used.

Education savings: what does the evidence say?

Your call. No outcome evidence picks a winner. Preference, culture, money and logistics decide. (Values and finance)

Canada: the education savings grant adds 20% on the first $2,500 contributed each year, to a $7,200 lifetime maximum per child. US: 529 earnings are federally tax-free for qualified costs; since January 1, 2026 up to $20,000 a year per student can go to K-12 expenses, up from $10,000, and since July 2025 qualified K-12 costs include curriculum, tutoring and test fees. Unused 529 money can be rolled into the child's Roth IRA up to $35,000 over a lifetime, if the account is more than 15 years old, the money has been in for 5 years, and the child has matching earned income

Sources

What else is worth knowing?

Governments offer tax-advantaged accounts for education, such as the RESP in Canada, which adds a grant, and 529 plans in the US. Starting early gives savings longer to grow. How much to save depends on your other priorities, including retirement.

Questions to ask each other

  • What do we hope to pay for, and what is realistic?
  • Which plan would we use and who would manage it?
  • What would we do with the money if our child does not go to college?

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First published 2026-10-03. Last updated 2026-10-05. General information, not medical advice.