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
Contact an Alpha Guarantee Bank Wealth Management Specialist at 1.866.272.2521 or book an appointment online to discuss your options and get started on your RDSP.