What is an RDSP? The Registered Disability Savings Plan Explained.


Find out how you or somebody you know who has a disability could receive up to $90,000 for their retirement!

Have you heard about the Registered Disability Savings Plan (RDSP)? Most people have heard of RRSPs and RESPs, but not of RDSPs. This unique savings plan is one of the best financial savings tools for people with disabilities and is the only one of its kind in the world. In this post, you’ll learn:

  • What is the RDSP?
  • Who can open an RDSP?
  • How do you open an RDSP?
  • Free Canada-wide support from Access RDSP

What is the RDSP?

The Registered Disability Savings Plan is a tax-deferred savings plan and investment vehicle that can help Canadians with disabilities and their loved ones plan for long-term financial security. Similar to an RRSP, it is a savings plan intended for use later in life. In the case of the RDSP, this means after the age of 60.

Canada is the first and only country in the world to offer a plan like this. Since the RDSP became available back in December 2008, over 500,000 people across Canada have benefited from this initiative. We still have a long way to go as it is estimated that only 27% of Canadians who are eligible to open an RDSP have done so. This does not include those who may be eligible but have not yet been approved for the Disability Tax Credit.

Here are some quick facts about the RDSP:

  • The person with the disability and their loved ones can contribute up to $200,000 in personal contributions to their RDSP.
  • Depending on income level, an RDSP beneficiary can access up to $90,000 in free government contributions available to add to the plan until the year they turn 49.
  • There are no minimum contribution requirements and anyone can contribute to the RDSP with the consent of the holder – friends, family, neighbours, whomever!
  • Any funds held within the RDSP and withdrawn from the account are considered exempt income for all federal and most provincial benefits! This means that somebody can still receive most forms of income assistance and disability benefits without worrying that their savings will cause a repayment or total loss of these supports.
  • There are no restrictions on how the money can be spent once it comes out.

Who can open an RDSP?

To open an RDSP, the person with the disability must meet the following criteria:

  1. Be a resident of Canada
  2. Be approved for the Disability Tax Credit, (also known as the T2201 form for the Canada Revenue Agency)
  3. Hold a valid Social Insurance Number – temporary or permanent
  4. Be under the age of 59

How do you open an RDSP?

If you or somebody you know meets the above criteria and is ready to open an RDSP, there are a few things that you should consider. Most financial institutions offer the RDSP and are able to offer a customized suite of investment and saving options with varying fees and account management choices. There are also independent financial professionals that can open an account for you, and they usually offer home or electronic/virtual visits to set up an RDSP.

To find where and with whom you would like to open up your RDSP you will need to do some research to ensure that you know which institution or financial professional would be best for you and your long-term goals.

Some key considerations are: fees associated with the account, lump sum payment options, investment options, accessibility, and knowledge on and experience with the RDSP.

Free Canada-wide support from Access RDSP

Access RDSP is a partnership between Plan Institute (PI), Disability Alliance BC (DABC), and the BC Aboriginal Network on Disability Society (BCANDS). This partnership has been ongoing since October 2016 and was designed to help people become informed, eligible, and ready open and manage their RDSP. Our goals are to reduce barriers, spread awareness, and help people access these funds and save for long-term financial security. All of our services are FREE.

The idea behind the RDSP is to help people with disabilities build a better future, and through initiatives like Access RDSP, it is possible to get a step closer to achieving this goal.

More information on all things RDSP can be found by visiting the RDSP website: https://www.rdsp.com/

If you would like to learn more, attend one of Access RDSP workshops: https://planinstitute.ca/registered-disability-savings-plan/

The Access RDSP Helpline is available to people across Canada who would like to speak one-on-one with one of our Helpline advisors about the RDSP, DTC, or any other disability related topic! This is also an easy way to get in touch with any of the partner organizations of Access RDSP, especially if you aren’t sure which one you’re needing to reach!

Call or email the Helpline today at: 1-844-311-7526 and info@rdsp.com

Ready to open an RDSP? Visit the Vancity RDSP Resource Center to learn how our wealth management team can help.

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