From tax advantages to generous government incentives, a Registered Disability Savings Plan (RDSP) can bring greater financial peace of mind to individuals living with disabilities and their families. Introduced by the federal government in 2008, RDSPs are designed to help people with disabilities build long-term savings. There are many misconceptions about the RDSP, but here are some important tidbits:
1) RDSPs come with many financial benefits
An RDSP offers access to government incentives with powerful benefits. Those who qualify can apply for the Canada Disability Savings Grant (CDSG), which can match contributions by up to $3,500/year with a lifetime maximum of $70,000. The Canada Disability Savings Bond (CDSB) can provide up to $1,000/year to low-and modest-income individuals, even without any personal contributions, with a lifetime maximum of $20,000.
2) You may be missing out
Many misconceptions persist around who can open an RDSP, including worries that RDSPs are only for severe disabilities. The truth is, RDSPs are available to Canadian residents who qualify for the Federal Disability Tax Credit (DTC) which permits a wide range of disabilities. It’s always recommended that individuals with medical conditions explore whether they may be eligible for the DTC with their medical practitioner.
3) It’s easy to get started
It’s simpler than most expect to open an RDSP. The beneficiary must be under 60, a Canadian resident, have a valid SIN and be eligible for the DTC. An RDSP can be opened at many financial institutions, including your local credit union. Concentra Trust, which provides support to credit unions across the country, can also help you open an RDSP. Learn more by calling 1-800-788-6311.
4) You may not need to contribute to benefit
Unlike an RRSP or TFSA, an RDSP has additional growth incentives through government contributions. Thanks to the CDSB, low- and modest-income individuals may be eligible to receive up to $20,000 in an RDSP without making contributions. That makes opening an RDSP a game-changer for low-income individuals.
5) There are advantages to saving in an RDSP
RDSPs grow on a tax-deferred basis, and contributions are not taxed when withdrawn by the beneficiary. This, combined with the government grant and bond, makes them advantageous for long-term planning and financial security.
What’s in it for you: RDSP by the numbers
Designed for long-term tax-deferred growth, an RDSP can grow fast when you make full use of available grants and bonds.
Get started today…
Whether you’re a parent, guardian, caregiver or an individual looking to secure a brighter future, Concentra Trust in partnership with credit unions are here to guide you through opening an RDSP and help you work towards lasting financial security. For questions, or to get started, visit your local credit union or contact Concentra Trust by calling 1-800-788-6311 or visit Concentra.ca.
Sponsored by Concentra Trust.
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