Every parent wants to give their child the best possible start in life, and education is key. In Canada, a four-year degree already costs over $75,000 and could exceed $100,000 for children born today. With so many financial priorities, education savings can be overlooked, but starting early and saving consistently allows your money to grow over time. In this episode of Smart Advice, Carissa Lucreziano sits down with Michael Keaveney, Vice President of Managed Solutions at CIBC Asset Management, who brings 30 years of hands-on experience helping Canadians build wealth and shares both professional advice and personal stories from funding his own children’s education. Together, they explore how to approach education savings like an investor: strategically, flexibly, and with long-term resilience in mind.
[04:14] Michael: “Those two things, starting early and having a regular investment plan are actually behaviors within your control, and focusing on what's in your control, is central to any investment strategy.”
[08:56] Michael: “You do get periodic spikes in volatility in the market for various and different reasons, but we know that if you take a longer-term timeframe, the market bounces back and goes on to new highs.”
[18:08] Michael: “I think it's entirely appropriate and a good idea for children to learn that the money didn't fall out of the sky. That a plan was put together, a conscious choice was made, maybe even at the expense of other options, and that the plan continues to be monitored.”
Michael Keaveney is the Vice President of Managed Solutions at CIBC Asset Management. With nearly 30 years of experience in wealth management, Michael has helped thousands of Canadians grow and protect their financial futures. His work focuses on building strategic investment solutions that align with long-term goals, including education planning, retirement, and wealth preservation. He also plays a key role in developing portfolio strategies that adapt to changing market conditions and evolving client needs.
Known for blending expert insights with real-world practicality, Michael brings a clear and steady perspective to market volatility, portfolio design, and disciplined investing. As a parent who’s navigated the education savings journey himself, he offers both professional guidance and personal experience. He believes that starting early and staying consistent are the cornerstones of successful investing. Through his work, he empowers families to plan ahead with purpose and confidence.
Connect with Michael Keaveney on his LinkedIn.
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Carissa Lucreziano: Welcome to Smart Advice, a podcast connecting you with timely financial advice, investment strategies and economic trends, empowering you with insights to make informed decisions about your money. I'm CIBC financial advice expert, Carissa Lucreziano.
What if your child's education ended up being one of the biggest investments you ever made? With the cost of a four-year degree in Canada already averaging $75,000 and projected to exceed $100,000 for children born today, factoring in tuition, housing and daily living expenses, education is no longer just an expense. It is a significant financial milestone that demands the same strategic thinking we apply to long term financial goals.
For many families, the thought of saving for a child's post-secondary education can feel like a stretch. Especially when balancing other financial priorities like mortgage obligations, retirement savings, and flexing a family budget to the rising costs of day-to-day expenses. But the truth is, time and discipline investing are powerful allies. The earlier you start, the more you can harness the power of compounding to grow education savings in a meaningful way.
Today, we're exploring how to approach education savings with an investor mindset. I'm joined by Michael Keaveney, Vice President of Managed Solutions at CIBC Asset Management. With nearly thirty years of experience helping Canadians grow and preserve wealth, he brings insights in how strategic investing can make a difference.
Michael, welcome to the Smart Advice podcast. It's so great to have you here.
Michael Keaveney: Thanks, Carissa. It's great to be here.
Carissa: So, Michael, let's start with the big picture. When you think about education as a long term goal, how should families approach it from an investment perspective? We get this question all the time.
Michael: Sure. Well, first of all, we have to acknowledge that for most families, an education savings goal probably requires a very significant chunk of their financial resources. Few people would be in a position to just snap their fingers and finance four years of post-secondary schooling, and maybe it's even for multiple children. You have to have a lot of preparation beforehand. You don't want to be making it up as those tuition bills and residence fees come due. A couple of things naturally fall out of that.
First, to your point, and you mentioned it, the earlier you start, the more you can save.
And second, it's probably not a one off commitment. Setting up things like a regular investment plan allows you to fund the goal on a regular basis, like an important pay-yourself-first commitment amidst all the other financial obligations you're inevitably going to have while you are raising children.
Those two things starting early and having a regular investment plan are actually behaviors within your control. Focusing on what's in your control is central to any investment strategy. Now, of course, once you've got those things down, now you have to consider all of the rules and regulations and options available to you as an education investor.
There's the potential for tax sheltered buckets. For example, we have lots of those types of things in Canada. TFSAs are a tax sheltered bucket. I know a lot of people use those for things like education. But, of course, there are purpose built vehicles as well. Like RESPs, which is really the subject of what we're talking about today.
And not only is that a tax sheltered bucket, but there are grants available. There are limits to how much you can put in. Depending on how much you put in, you get certain grants as well. So, that's going to be part of the investment strategy as well.
Very importantly, this is a big financial goal, maybe will not be able to be achieved solely by investing in low interest rate vehicles. You may have to take some investment risk exposure in your portfolios. But the nature of that exposure is going to vary over time. So, it's a long term strategy.
But I can say, not only as an investment professional, but on a personal note. I mean, I'm a living experience of this right now. I have two university-age children. One at the end of her university career, and one midway through. We wouldn't have been able to finance it without having RESPs available to us, and using the financing of grandparents as well. I come at this from both an investment standpoint and a personal experience standpoint.
Carissa: Congratulations. That's amazing and congratulations on that savings plan.
Like you mentioned a few things. I know, I have a little one, he's only six, but you mentioned something really important. This is a long term strategy. You have that opportunity for growth . And in terms of registered plans, as you mentioned, the government will match up to 20% through the Canada education saving grant. That's up to $500 a year, lifetime maximum of $7,200 per child. You want to get the opportunity for those grants and those extra components within the government programs like the Registered Education Savings Plan, and there's also Canada Learning Bonds. So, it's a really good and important message that you give in starting early to get really acquainted with all the benefits of a Registered Education Savings Plan.
You have a ton of experience in investing strategies. You've done a lot of work in educating Canadians. You've written articles and great pieces. How can families build an RESP investment strategy that helps grow their savings while managing risk and staying resilient through our ever changing market conditions?
Michael: It's a great question, and we're experiencing it right now. We have, let's call it heightened volatility this year. But the markets have been resilient. In some ways, the advice I would give about staying resilient through changing market conditions is similar to the advice we would give related to any long term goals, such as retirement. As if you were saving for retirement, keep an eye on the long term. Especially if the child is still some years away from going to school. Stay invested as long as your time horizon is fairly long.
My own two children are going to university now, as I said, but my wife and I have had RESP plans in place from them since they were babies, that are of great use to us now. My daughter was born in 2003, my son was born in 2005. Now, think about the changing market conditions and upheaval over that time, or really any 20 year period.
In that particular period, we had a global financial crisis in 2008. It could have been very tempting to move to the sidelines at that time. Now, we didn't. Mostly because I had the benefit of being a student of financial history myself. I knew, and was counseling others at the time, to remain invested for their long term needs.
We know that these things happen from time to time. You do get periodic spikes in volatility in the market for various and different reasons. But we know that if you take a longer term timeframe, the market bounces back and goes on to new highs. Staying invested for the long-term is certainly a message that is relevant to RESP portfolios.
But, the other thing that is relevant as well is that, I actually think that you should transition to more conservative investments as the time gets nearer for you to actually need the money. In the world of RESPs, the long term eventually becomes the short term. It's an 18 to 20 year time horizon when your baby is born. But a year or two before they start going to university. All of a sudden, you're starting to look at a shorter term time horizon, and maybe something comes up in the recent past.
For example, we had a downturn due to covid. If it had been at a period where the tuition bills were coming due at that time, you probably would not have liked to have been completely exposed to the markets at that time. The thing about an education portfolio is the time horizon starts out long and gets shorter. That's why there probably needs to be a little bit of a transition in your approach, as you move towards having to finance that education.
For that reason, I think people should consider making investments in their RESP solutions that are purpose built for financing and education, which has a pretty defined time horizon on the way to education, and then a reasonably well defined time horizon during the education period. That's why CIBC has recently made available for investors our new target Education Portfolios.
Carissa: Tell us more about CIBC Education Portfolios. How are they designed to support families saving for a child's education?
Michael: Sure. What we've launched relatively recently are a suite of five of these portfolios. There is one that's called a Target 2045 Education Portfolio. 20 years in the future, there's going to be some education needs for Canadians. There's a 2040, a 2035, a 2030, and then one we're calling a graduation portfolio, so more suitable for somebody who's actually in the phase of making education expenditure commitments right now.
There is a suite of these five portfolios. They're all diversified portfolios of funds that invest in some combination of the stock market and the bond market, but the mix will change over time as we get towards those target dates.
For example, that 2045 portfolio that we've launched now, is something that we are earmarking towards children who have, let's call it a fifteen, to eighteen, to twenty year time horizon before they actually need to spend money on education. For that reason, we think right now in the portfolio, a 100% exposure to equities could be suitable, depending on the individual.
That 2045 portfolio, however, is going to shift down in its allocation between the equity market and the bond market. To the point where, when we get close to that 2045 period, which is 20 years from now, it will be completely bonded. In the interim, it will be some mix between them.
But it's also prudent, I mean, we're launching these portfolios right now. They're not just for babies born this year, there will be children who are five, ten, and fifteen years away from their education. We've built portfolios for those children as well. The 2040, the 2035, and the 2030. Those will be current mixes of bonds and stocks, unsurprisingly, more towards bonds as we get closer to the actual fulfillment date.
The mix changes over time, and will change with you as the years pass, so that you don't have to do it yourself. It's important to note, though, that overall, if we took a look at the full twenty-year time horizon for the 2045 portfolio, that if you just looked at its average mix between stocks and bonds, it looks a little bit like a Balanced Fund, 60% plus in equities.
But, it's important to note that it's not 60% equities every year. It starts out at 100% and gets to 0% as time goes on. It might be balanced over the average lifetime, but it moves from being much more aggressively focused on stocks in the beginning to much more aggressively focused on bonds towards the end. It changes with the time and is matched up as close as reasonable to the time that one will need the portfolio.
The way we have been thinking about these portfolios, is that the typical consumer of those portfolios is somebody who is going to be putting money into the portfolio on a fairly regular basis. Not coming up with $100,000 needed on day one, but putting a little bit of money in at a time, taking advantage of our RESP grants along the way, and slowly but surely financing the portfolios over their lifetime. That's who I think these portfolios are best suited for.
There are certainly other options that CIBC makes available. You could certainly buy a Balanced Fund. You could certainly buy a GIC. Those will be suited for certain types of clients who may already have the money earmarked in the GIC, and know exactly how much they need, and the GIC might finance it already. Somebody who was going to take a more active approach to their asset allocation in each year. Somebody who has the interest and the time to do that.
They might say, I'm going to have a balanced fund right now, and I'll choose the time when it becomes more conservative or less conservative. But these are built for somebody who wants that glide path of stocks through to bonds done for them over time, is willing to take that market exposure in the early years, and absolutely wants a more conservative exposure during the time, while they're in university, and close to the time of sort of university.
Now, with any financial product, of course, you have myriad options available to you. It's very important to discuss with your financial advisor to find out which of those options are right for you, because proper advice is certainly tailored to your own individual circumstances.
Carissa: Yeah, that is the key advice in putting that plan together to see this all come to fruition. Thank you for going through it. As Michael mentioned, for more information, if you want to understand if these portfolios are suitable for you, your family and your future plans, you can connect with a CIBC advisor in cibc.com. Find a local advisor near you.
One thing I've really come to appreciate, both as a professional in the industry and as a parent, is that education planning isn't just about setting money aside. It's a chance to model smart financial behavior and bring your child into the process. When you take them on that journey with you, you're building more than just savings. You're building habits, confidence, and a real understanding of value.
For our listeners, there's some simple ways to get started in education and bringing your children along the way. Keeping that conversation open, talking about what you're saving for, and how it works. Normalize that money discussion early and it takes some time. You can use simple visuals, even like a digital savings tracker, or an RESP snapshot. Show them how money can grow with time and consistency. We have a great RESP growth calculator on cibc.com, if you want to check it out.
I think last is celebrating small wins, because it is a journey. As Michael just mentioned, it's a long journey. It could be a 20 year journey. Whether it's a monthly contribution, hitting a goal, or receiving a grant, acknowledge the moment. It really helps children connect with the effort and the outcome. These considerations in financial education for children, they can move the needle and perspective from saving on their behalf to saving with them.
Michael, from your perspective, how can families turn education savings into a teaching opportunity, and how can we use investing as a tool to build that financial resilience?
Michael: That's a great question, Carissa.
As I listen to you with all your ideas there, I wonder if I missed out on some opportunities for myself with my own kids. But I think it's entirely appropriate, and a good idea for children to learn that the money didn't fall out of the sky. That a plan was put together, a conscious choice was made, maybe even at the expense of other options, and that the plan continues to be monitored.
As time goes on, the child can increasingly have a voice in that plan. That seems to me to be very helpful to promote. You're talking about here, a sense of financial literacy. I'm sure, involving them in that, I think is very appropriate. I am a fan of giving the child agency at the right time, there'll be a time, for example, when they might even be able to make their own contribution to education savings. Maybe it's a high school job, maybe it's a job they're holding down while they're at college or university.
It's possible to say to them, “Hey, the education savings are all taken care of. Don't worry about that. The money you earn in your own job is all for yourself.” My personal opinion, and I respect it, might actually not be everybody's take, is that that actually could be a missed opportunity to give the child a chance to make a financial contribution to an important goal that's intangible, right?
I mean, a lot of the things that younger people might be thinking about, if they've got their own agency or what they want, might be things that are much more tangible. Education is an intangible goal, and it does really require a lot of heavy lifting to make it real to them. But if we can sit down with them and talk to them about how this $100 that came to them in whatever form, maybe some of that should go to education, which we can agree upon is an important goal.
I should also note that some families might be so fortunate as to have extended family members who could get involved as well, such as grandparents or aunts and uncles. If you have it, that's a blessing. It might come as a lump sum or gift. That's another opportunity to involve children in what is going to be done with that money. By all means, if a gift does come along, or something like that, that's something meaningful, we welcome them.
But lump sum and gifts, they'll probably augment, not replace your other plans. Take those as opportunities with the kids to incorporate a lump sum or a gift into the same types of investments you're already making to finance the education through a regular plan. And that allows everybody, the children, the adults, to have an easier time keeping track of the entire approach they're taking to finance their education.
Carissa: Yeah, I love that. I'm going to add that to one of my tips. It's such a great point in getting the children to contribute, if they can. I think back to when I was going through post secondary, my parents did a great job in saving, but I remember my mom took on a temporary part time job. I had asked her, “Why do you have a second job?” She said, “ To make sure that you're not left with any bills or debt from your post secondary education.” It was a lesson for me that really hit home. Like, “Wow, I better do really, really well in school and make my parents proud, because they're going that extra mile for me.”
These lessons, they really, really matter.
Let's talk a little bit about if it ends up that the child doesn't go to post secondary for whatever reason, and that could happen. How should families, if families find themselves here, how should they manage their RESP savings and other education investments?
Michael: Right, because plans can change, and things might not turn out to be what you have planned at the time. I think the first thing to think about, if somebody's making a decision at eighteen, nineteen, or twenty, and the plans have changed, well, guess what? They could change again.
We do have to remember that an RESP can be left open for, I think it's up to thirty-six years. It's not time to panic when somebody is eighteen or nineteen and wants to take a little bit of a different path. Not everything has to be decided when somebody is the traditional college age. There's baked in extra time to make decisions.
One can also change our RESP beneficiaries, in certain circumstances, if there's siblings available. That can be potentially arranged. RESPs can be closed as well. If you've made contributions, you would not have to pay tax, for example, on your own RESP contributions. But there would be some ramifications for grants awarded, the Canada Education Savings grant, the Canada Learning Bond proponents of the RESPs, there would be some ramifications there, and there are some age limits around that as well.
Withdrawals can be made from RESPs for non-traditional education uses as well. For example, there can be some room for RESP transfers to an RRSP. Money may also be able to move to programs like a Registered Disability Savings Plan, if that's something in someone's life. RESPs may also be usable for apprenticeships as well, which is, might not be something that people are thinking about as they are building up an RESP. But once again, they are subject to certain rules and regulations.
There are actually a number of things that can be done if, at that moment, somebody decides that they are not going to pursue secondary education. But I think one of the main things is that they can remain open till age thirty-six, so there is a lot of flexibility in the timing.
But then there are other things that can be done as well, and there's a laundry list that I've given. But all of those things are subject to various rules and regulations and situational complexities. This is an ideal opportunity at that time to, once again, speak with a CIBC advisor who can talk to you about how your situation would apply to those options.
Carissa: Yeah, thank you for taking us through that. There's so many more options today than there were when RESPs first came out. It's good for families to understand this, that there are options, because the likelihood of that happening could be. But just even over the years, as you mentioned, the vast array of different types of education paths has opened up for RESP. It is absolutely important to check that out and speak with an advisor.
Last question, Michael, and you've given us some really great insights today, what is one key takeaway you'd like to leave our listeners with when it comes to planning for a child's education?
Michael: Well, I think I'll keep it short, but it combines, I think, a few of the things that we've been talking about. Financing a child's post-secondary education is one of the most important financial ambitions that we have seen for many Canadian families. It's a big goal. It might seem daunting if you just kind of look at the end state that you need, but starting early and contributing regularly and understanding the options available to you that's going to set you on the path to success.
Really, you don't have to know everything in the beginning. Getting started is actually as easy as speaking with your financial advisor who can advise you on a lot of these things. You're never going to be more busy, I think, than in those years where you're actually raising a child. Planning ahead is very, very important. The investment that's being made here in a child's education, there's probably $1 payoff to it, but it's about so much more than money.
I don't think there are too many things much more important than having a great plan built around your child's education.
Carissa: Well said, Michael, thank you so much. Thank you for being with us today. Thank you for sharing your insights on this episode of Smart Advice. It's been such a pleasure to have you.
Michael: My pleasure, Carissa. Thanks very much.
Carissa: When it comes to planning for a child's future, having a roadmap as early as possible is key. It's a great opportunity to involve the children in your life. Teaching the impact of regular savings over time is a foundation in money values that will stick, how to set goals, and work towards them.
Thank you for tuning in to Smart Advice. I'm Carissa Lucreziano. If you enjoyed this episode, feel free to share it with your social network. To make sure you never miss an episode, follow Smart Advice on your favorite podcast platform.
For more tips, tools and financial advice, visit cibc.com/smartadvice. See you next time.