Explaining the Registered Disability Savings Plan (RDSP) transcript page

Do you, or someone you love, live with a disability? Then a Registered Disability Savings Plan, or RDSP, may be right for you.

An RDSP is a registered account designed to help Canadians with disabilities and their families save for their future. With an RDSP, your savings can grow tax-free, and government grants and bonds can help your contributions go further. The funds can be used for healthcare or any other expenses.  

To qualify for an RDSP, you must be a Canadian resident under the age of 60, with a valid Social Insurance Number and be approved for the Disability Tax Credit.

Plan holders are the people who open and manage the plan, typically the beneficiary’s parents or legal guardians. You can open and manage your own plan if you’re the age of majority.  

How does it work? Anyone can contribute to the plan until the beneficiary turns fifty-nine. There is no annual contribution limit, but there is a lifetime limit of two hundred thousand dollars. Contributions are not tax-deductible, but the investments you purchase grow tax-free inside the plan.

Government programs can help you save even more. The Canada Disability Savings Grant matches contributions to a maximum of three thousand five hundred dollars per year, and a lifetime limit of seventy thousand dollars. The Canada Disability Savings Bond is for families who earn low or modest income, and does not have a minimum contribution requirement. Depending on your income, you can receive up to one thousand dollars per year until the beneficiary turns 49, with a lifetime limit of twenty thousand dollars. Visit Canada.ca to learn more.

How do you withdraw and use the money? Payments can be withdrawn from the RDSP at any time but they must begin the year that the beneficiary turns 60.  A portion of the funds are taxed as income when they’re withdrawn from the account. Grants may need to be returned if they do not meet certain criteria. Learn more about withdrawal rules at Canada.ca.  

An RDSP can be a great way to take charge of future financial needs, but it’s not the only way. To find out if an RDSP makes sense for your unique situation, go to Edward Jones dot ca slash RDSP. Or contact your Edward Jones advisor today.

Edward Jones. We do money differently.