A Registered Disability Savings Plan (RDSP) provides long-term financial security for a person who receives the federal disability tax credit – whether that person is you or someone close to you. The person who opens the plan is the plan holder, and the person who receives proceeds is the beneficiary. A legally-competent adult can be the RDSP beneficiary and the plan holder.
RDSP benefits
- It has no effect on benefits from income support programs like Social Services or Guaranteed Income Supplement.
- Government money can help jumpstart your RDSP savings:
- The Canada Disability Savings Grant (CDSG): The federal government matches your RDSP contributions with up to $3,500 per year, and a lifetime total of $70,000. The size of the CDSG depends on your income level.
- The Canada Disability Savings Bond (CDSB): Depending on your income level, you can receive up to $1,000 per year, and a lifetime total of $20,000, into your RDSP from the federal government. You don’t need to make contributions to receive the CDSB.
- Once the RDSP beneficiary is over 18 years old, family income is based on their and their spouse’s income – not the plan holder’s.
RDSP limits
- Government grants and bonds are given until the RDSP beneficiary reaches age 50.
- There’s a lifetime RDSP contribution limit of $200,000.
- The RDSP beneficiary needs to start making withdrawals when they reach 60 years old.
- The RDSP is intended for long-term savings – the Grant and Bond are to encourage savings and should remain in an RDSP for at least ten years.
You can be an RDSP beneficiary if:
- you’re a resident of Canada under age 60
- you have a valid social insurance number
- you’re eligible for the Disability Tax Credit
Call our Wealth Advisory Team at 1.866.272.2521 or book an appointment online to discuss your options and get started on your RDSP.