Final answer:
An RESP must be terminated by the end of the 35th year following its inception. Withdrawals, known as Educational Assistance Payments, can be made once the beneficiary is in post-secondary education. Options exist if the beneficiary does not attend post-secondary education but conditions and tax implications should be reviewed with a professional.
Step-by-step explanation:
When a contributor starts to withdraw income from a Registered Education Savings Plan (RESP), there is a deadline by which the plan must be terminated. The RESP must be closed by the end of the 35th year following the year of the plan's inception. This means that, typically, all funds must be withdrawn and the account must be terminated no later than 35 years after the RESP was opened. It is also important to note that subscribers can start making withdrawals for educational purposes, known as Educational Assistance Payments (EAPs), once the beneficiary is enrolled in a qualifying post-secondary educational program.
In cases where the beneficiary does not go on to post-secondary education, the contributor has the option to transfer up to $50,000 to their own or their spouse's Registered Retirement Savings Plan (RRSP), provided they have the contribution room, or they can withdraw the money as an Accumulated Income Payment (AIP). Specific conditions and tax implications apply to these options, so it is advised to consult a financial planner or tax expert.