Registered Disability Savings Plan (RDSP)
Long-term financial security
An RDSP is an important step in securing a safe and enjoyable life for people living with a physical or mental disability. For parents, an RDSP can also help ensure that their child is set up for a bright and secure future.
To qualify for an RDSP, you must meet the following criteria:
- Qualify for the Disability Tax Credit
- Have a valid SIN
- Canadian resident
- Under 60 years of age
Top 3 Reasons to Open an RDSP
- Savings Boosters – Besides the income generated within your RDSP, the federal government may contribute up to an additional $90,000 to your account. If you cannot afford to contribute, the government may still deposit up to $20,000 on your behalf. Detail
- Tax-Shelter – To help you save, earnings within the RDSP accumulate tax-free until the money is withdrawn. Instead of losing a portion of your earnings to taxes, you are able to use these un-taxed funds to accumulate additional income. Think of the deferred tax payments as an interest-free loan from the government.
- Federal Benefits – Savings within your RDSP will not affect your eligibility for Federal Government benefits, such as the Canada Child Tax Benefit, Old Age Security, or Employment Insurance.
Tip for Parents
RRSP funds can be rolled over from a deceased individual’s RRSP to the RDSP of a financially dependent child or grandchild. RRSP funds directly transferred into an RDSP will be sheltered from taxation until the owner of the RDSP withdraws the money. As a result, the RDSP holder can use the tax-deferred funds to accumulate more wealth.