Registered Disability Savings Plan (RDSP): Your Path to Financial Security

Registered Disability Savings Plan (RDSP): Your Path to Financial Security

The Registered Disability Savings Plan (RDSP) is a long-term savings plan designed to help Canadians with disabilities secure a stable financial future through tax-deferred growth and government incentives.

The Registered Disability Savings Plan (RDSP) is a long-term savings plan designed to provide Canadians with disabilities and their families a way to secure a stable financial future. Established in 2008 by the federal government, the RDSP offers unique advantages through tax-deferred growth and generous government incentives. It’s a powerful tool to help you build long-term savings. To learn more about RDSPs, you can visit the Government of Canada’s official page on RDSPs. 

RDSPs offer several life-changing benefits:

  • Tax-deferred growth
  • Government contributions
  • Financial security
  • Long-term savings
  • Flexible Contributions
  • No impact on other benefits

Eligibility Requirements

To qualify for a Registered Disability Savings Plan (RDSP), the beneficiary must meet the following criteria:

  • Be eligible for the Disability Tax Credit (DTC)
  • Have a valid Social Insurance Number (SIN)
  • Be a Canadian resident
  • Be under 60 years of age

An RDSP can be opened by a holder who manages the account. If the beneficiary is an adult and legally capable of entering into a contract, they can act as both the holder and beneficiary. In situations where the beneficiary is not able to act as the holder, a parent, spouse, common-law partner, sibling, or legal guardian may take on the responsibility of managing the account to ensure the beneficiary receives the funds.

For more detailed information about eligibility and requirements, consult the CRA's official guide on RDSPs.

The Disability Tax Credit (DTC) is available to individuals with a broad range of disabilities. Here are some examples of conditions that may qualify:

  • Vision impairment: Severe vision loss or blindness.
  • Hearing impairment: Profound hearing loss or deafness.
  • Mobility issues: Conditions significantly restricting movement, such as severe arthritis or paralysis.
  • Mental functions: Conditions impacting mental functions necessary for everyday living, such as severe ADHD, autism, or schizophrenia.
  • Life-sustaining therapy: Conditions requiring ongoing therapy, such as kidney dialysis or insulin therapy for diabetes.

Eligibility depends on the severity of the condition and its impact on daily living activities. Certification from a medical practitioner is required. For a comprehensive list of qualifying conditions, visit the government website: Disability Tax Credit (DTC) - Canada.ca.

Government Contributions

The Canadian government offers significant support to grow RDSP savings, allowing beneficiaries to access up to $90,000 through Canada Disability Savings Grants and Bonds:

  • Canada Disability Savings Grant: Up to $3,500 annually, with a lifetime maximum of $70,000.
  • Canada Disability Savings Bond: Up to $1,000 annually, with a lifetime cap of $20,000.

Grants and bonds can be matched retroactively for up to 10 years, ensuring that beneficiaries don't miss out on previous opportunities.


Tax Benefits

RDSPs also come with excellent tax advantages:

  • Your contributions aren’t tax-deductible, simplifying your tax obligations.
  • Investment earnings grow tax-free, helping your savings accumulate faster.
  • Withdrawals may be partially taxable, including portions like grants, bonds, or investment income.

These benefits maximize your savings potential and provide a strong foundation for a secure financial future.

We are committed to guiding you through every step of opening and managing your RDSP, ensuring a secure financial future. Whether you're seeking answers or ready to open your RDSP account, our team is here to support you.

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Have questions or want to get started with an RDSP? Reach out to us — we’re happy to help you get started.

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Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax or similar matters.