As of late we have seen and received increased interest on information on plans and programs in place by the federal government to help people with disabilities as well as people with children (including adult) with disabilities.
Here are 7 Things You Should Know About Registered Disability Savings Plans (RDSP)
- Long term savings Plan: A registered disability savings plan (RDSP) is a savings plan that is intended to help people with disabilities save for the future. Saving in the plan must stop at the end of the year in which you turn 59 years old.
- Taxes deferred: All income, grants and bonds are taxed deferred while in the plan.
- Government matching: There is a matching program of up to 300% of your annual contributions. You contribute up to $1,500 and you may be eligible for an additional $4,500 between government grants and bonds. Grants and bonds are dependent on family income.
- You must be eligible for the disability tax credit to open this plan (DTC).
- You can carry forward your contribution room up to 10 years.
- You must wait 10 years from last contribution before redeeming an income otherwise there could be a clawback of government grants and/or bonds.
- Earliest pension date could start at age 59 if you make you last contribution at age 49.
These may be the top seven things you need to know about a RDSP plan but talking to your financial advisor for more detail on what’s involved that may help you get additional resources for your future. Unlike RSPs and RESPs this is free money. Not just a tax deferral. If you or somebody you know may qualify for this little known plan, we can help.
This information has been prepared by Linda J. Levesque & Daniel Fearon who are Investment Advisors for HollisWealth® and does not necessarily reflect the opinion of HollisWealth. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. The Investment Advisors can open accounts only in the provinces in which they are registered. HollisWealth® is a division of Industrial Alliance Securities Inc., a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.
*Insurance products are provided through Hollis Insurance. Only services offered through HollisWealth®, a division of Industrial Alliance Securities Inc., are covered by the Canadian Investor Protection Fund.