4 - Friday, June 21, 1981 - North Shore News Future shock for RESP holders: pass the martini GOD ONLY knows I make enormous, endless, non-stop sacrifices for my children, such as sharing the olives for my martinis with the greedy little beggars. But am ! doing enough? If you have caught the note cf anxiety in the above, read on. The subject of today’s piece is the reg- istered education savings plan (RESP), a tax-sheltered device aimed at allowing little Johnnie or Joni to sail through college or university without actually bankrupting or otherwise impov- erishing the family for three gen- erations. But the theme of today’s piece is anxiety. Which is marketing’s greatest tool. Are we wearing the right runn- ing shoes/jeans/deodorant? Should we add a solarium, pool or hot tub to the house this year? Are those (ghastly) wine coolers still ‘‘in,’” or has the California smart set long dropped them for (ghastlier) cranberry juice, or (ghastliest) the essence of a politi- cally correct Nicaraguan root? But, for many old-fashioned moms and dads, nothing is quite 30 anxiety-making as giving our children the Right Start in life, meaning a good and proper education, if indeed not the best that money can buy. Thus the RESP, which is an in- strument for contributing to an account whose growth is untaxed interest — plus the contributions for kids who end up net making the grade, or dropping out in favor of ski studies at Whistler U. — generates the money to pay for your child’s post-secondary educa- tion. ” Or will it? Let me say at once: [’ve bought such plans for all four of my still-eligible children. So, not- withstanding what follows, my own decision was to buy into the RESP vision of the future. Yet I’m obliged to say: this par- ticular future may not work. It’s a gamble — and, I would say, a greater gamble than it was in the past. Roughly, the three or four available plans work the same way. Say you have a newborn. Be- fore infant Johnnie or Joni reaches age one, if you are as conscientious (and anxiety-ridden) as Iam, you will enrol him/her in a scholarship plan. You buy ‘‘units"’ of the plan. You can make a single one-shot payment, currently costing around $740 per unit, or pay monthly or yearly. And, presto, when Johnnie begins university you will get your contribution back, and, in his se- cond, third and fourth years of education, he will get a handsome Trevor Lautens GARDEN OF BIASES chunk of money: currently, one unit purchased 18-odd years ago provides Johnnie with about $2,150 a year. That will pay for tuition for most courses at UBC or Simon Fraser, and the parent who bought the plan for Johnnie in the 1970s will be well satisfied. But of course tuition fees, and other university-associated costs, are rising — and probably will rise faster than the general rate of in- flation. At the University of Victoria, tuition is rising at just below 10% a year. An inflation-plus formula at UBC set for the next few years will also bring increases of about 18% each year. You can see what happens. The one RESP unit of the 1970s is currently just adequate to pay for tuition, plus a little change. But the one unit bought for Johnnie today, just before his first birth- day, projected to around the year 2010, won't be nearly enough to do the same thing then. In fact RESP salesmen — and I can testify from my recent experi- ence that they’re far hungrier than they were a few years ago, scrambling to sell to what seems like an ever-diminishing, cash- strapped, taxed-to-death middle class — are now pushing parents to buy as many as 12 units for their newborns to anticipate the 174 PEMBERTON AVE. NORTH VAN. rw, NS — FAST COLLISION REPAIRS CALL THE PROFESSIONALS AT JAYLORMOTIVE 1959 LTD. FREE RENTAL COURTESY CARS. B.C.A.A. APPROVED — A.R.A, CERTIFIED 1.C.B.C. VENDOR FOR ALL MAKES JAYLGRMOTIV E QUALITY WORKMANSHIP TRUSTWORTHY SERVICE CONSULTATION OR APPOINTMENTS A KY est: ancouver Seafood & Griil 922-3312 AEP wD