Registered Disability Savings Plan (RDSP)
A Registered Disability Savings Plan (RDSP) is a savings plan that is intended to help eligible Canadians with disabilities and their families save for their long-term financial needs.
What You Need To Know:
- To qualify for an RDSP, the beneficiary must be a recipient of the Disability Tax Credit, be under the age of 60 and be a resident of Canada.
- There is no limit on contributions per year, but there is a lifetime limit of $200,000 in total contributions.
- Until the age of 49, you are eligible for contributions for the Canada Disability Savings Grant (CDSG).
- While investment growth is tax-deferred, contributions are not tax-deductible.
Withdrawing your Money
RDSP withdrawals, which are called (DAPs) Disability Assistance Payments can be made to the beneficiary for any purpose and anytime. However, by the end of the year when the beneficiary turns 60 they must start to receive regular payments, called Lifetime Disability Assistance Payments (LDAPs). Once these start they will continue for the remainder of the life of the beneficiary.
Support from the Government
Canada Disability Savings Grant
For every $1 put in an RDSP account, the federal government can (if your family income is below $98,040) match with up to $3!
Canada Disability Savings Bond
For people living on a low-income (less than $32,028), the federal government will put in $1000 each year for 20 years!
For people living on an income between $32,028 – $49,020 they can still receive a partial bond.
Why the RDSP?
For those with a disability, or that have a friend or family member with a disability, this investment tool can help establish peace of mind. Knowing that you can help your loved one have a secure financial future is worth the time and effort.