The Registered Disability
Savings Plan:
Saving today for tomorrow
Canada Disability Savings
Grant
If you are a Canadian citizen with a disability, you may worry about how you are
going to save for later years. Disabled Canadians face more employment challenges than their able-bodied
counterparts, and that can make it difficult to save adequately for retirement. The Canadian government has come up
with a program that allows disabled Canadians to have a built-in savings plan on which they can draw when they
retire.
Canada's Registered Disability
Savings Plan details

The RDSP allows diasbled Canadians to have a savings plan for
retirement |
The basics of the plan are as follows:
Matching amount from the federal government
For every dollar the applicant puts into the RDSP, the federal government will
match it with up to $3 with what is known as a Canada Disability Savings Grant. This is assuming your household income is below the maximum level of $87,123.
Eligibility for a $1,000 grant
Low-income applicants may be eligible for a $1,000 grant annually for 20 years,
known as the Canada Disability Savings Bond. Mid-income families (those with incomes between $25,356 and $43,561
may still qualify for a partial bond.
Good return on investment
The RDSP is one of the
best returns on investment available. In addition, the RDSP is exempt from most provincial disability benefits.
In other words, the balance in your RDSP account is not held against you in terms of your eligibility for
benefits under provincial law. Finally, there is no limit on what you can do with the money when you withdraw
it. It’s your money to do with what you please.
The Disability Tax Credit
To be eligible to apply for an RDSP, you must be less than 60 years of age. You
need to first qualify for the Disability Tax Credit and the Canada Child Tax Benefit (if you have dependent children under the age of 19).
Essentially, The Disability Tax Credit reduces your taxes in recognition of your disability. Although this does
reduce the amount of taxes you pay, it is non-refundable meaning that you will not get any extra money back on
your tax refund because of it.
Choose a Holder for your RDSP
You’ll also need to designate a Holder for your RDSP. This person will manage your
plan and make decisions about investments, payouts etc. In most cases, the Holder will be you. As long as you are
an adult are competent in making such contractual decisions, you are considered the Holder unless you appoint
someone else. If your financial institution feels that you are not able to manage your financial affairs, they may
ask that you have a legal representative manage your account for you.
Making contributions to your RDSP
Although most people contribute to their own RDSP, it is possible for anyone to
contribute to your account, provided they have your written permission. Contributions to your RDSP from other
people are subject to the same government matching grants as contributions you make yourself.
If you are a Canadian with disability, you may be eligible to open an RDSP. It’s
by far one of the best ways to save for retirement if you are a disabled Canadian. There are many benefits to
saving money this way, and it’s worth looking into. Ask your financial planner for more details and information
about Registered Disability Savings Plan.
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