RDSP > Tutorial > Why open an RDSP?

Why open an RDSP?

An RDSP allows you to save money for the future, without paying tax on the earnings. The federal government will contribute as much at $90,000 to YOUR account. Your provincial government disability benefits will be unaffected. Really, you have nothing to lose and everything to gain…

Top 10 reasons to open an RDSP

  1. You choose where to invest your money. All the major Canadian banks are offering RDSPs.
  2. The government contributes generously! For every $1 saved, they will match up to $3.
  3. If you have a low income and cannot invest yourself, the government will still save for you!
  4. An RDSP will not affect your disability benefits.
  5. This is an easy way to save for big items like mortgage down payments, home renovations, cars, and vacations.
  6. There are no restrictions—you can spend the money on anything you choose.
  7. When you close an RDSP, your contributions and investment gained are yours.
  8. With savings tucked away, the future becomes yours to imagine.
  9. If you become more powerful economically, decision makers will need to take you seriously.
  10. The whole world is watching. What happens here in Canada may determine the future of people with disabilities in other countries.

RDSPs are, however, just one piece in the puzzle. To achieve future security, we recommend that you look at the big picture financially and create a “future plan.” Contact us to find out more

Comments

how much per year of income is exempt from taxes for a disabled person to save having an RDSP? If this program started recently why is the older age group before 65 years unable to access grants . why does is it serve people below a certain age group.

dave
March 18, 2011
2:08 pm
Reply |

    Dave,
    I’m not sure I understand your first question. If you are asking how much of a contributor’s income is exempt the answer is none. If you are asking how much of the investment income inside the RDSP is exempt, the answer is all of it while it is in the RDSP and none when withdrawn, although withdrawals are taxed in the hands of the person with a disability who owns the RDSP.

    As for why older people are excluded, generally the answer is that it a plan to assist younger people save for their later years. That is, it’s not designed to assist seniors who become disabled in their later years. Whether it should or shouldn’t be, however, is a question for debate.

    jackstyan
    March 31, 2011
    3:10 pm
    Reply |

Is an rdsp contribution tax deductible?

Jim stuart
October 7, 2011
3:05 pm
Reply |

    Hi Jim,

    Contributions to an RDSP are not deductible and are not included in the beneficiary’s income when withdrawn, and investment income earned in an RDSP grows tax-free. However, grants, bonds and investment income earned in an RDSP become included in the beneficiary’s income for tax purposes when paid out of the RDSP.

    joelcrocker
    October 21, 2011
    10:13 pm
    Reply |

How is disability determined?

Lee
March 17, 2012
8:55 pm
Reply |

Hi Lee,
The best way to determine disability is to seek either a trusted medical practitioner or someone of the like (therapist, OT, etc) who would be able to do a medical assessment for you. There are a range of factors used to determine whether or not a person can qualify as having a disability, and the practitioner would be able to determine that for you.

mcrocker
May 1, 2012
11:24 pm
Reply |

Hi Lee,
To determine if you qualify or not, you have to qualify for the disability tax credit.
To determine if you qualify for the DTC, you must have a medical practitioner to sign a form from this website: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rdsp-reei/ctrbtn-eng.html
It is the T2201 form.

Regards,
Scott

Scott
September 27, 2012
10:06 am
Reply |

I was 48 when I opened a RDSP after a auto accident and put in $ 34,000 the government put in $ 10,000. I have been told if I take out any of my 34,000 I will lose all the grants and savings from the government because it was not been 10 years.

kel
April 14, 2013
4:49 pm
Reply |

Add a comment

Login