If you are a disabled Canadian citizen who receives a Disability Tax Credit (DTC), Registered Disability Savings Plans (RDSPs) are your best option for contributing to your future financial security. It’s easy to see why when considering how it works and how easy it is to build.
What Do I Need To Get An RDSP?
In order to get an RDSP, you need to live in Canada and have a valid Social Insurance Number (can be permanent or temporary), be under the age of 59, and you must be approved for a DTC.
Getting approved for a DTC requires you to fill out form T2201 with a medical professional. This is a short process, but getting results back will take a minimum three to four months.
You can claim a DTC when doing taxes, which will reduce any amount you owe to the Canada Revenue Agency (CRA).
What Makes An RDSP Different From Other Savings Accounts?
RDSPs are different because you’re not the only one who contributes to it – the government does, too. This is also true if you have little to no income of your own. If you have low income, the Canada Disability Savings Bond can provide up to $20,000 to put into your RDSP.
The Canadian Disability Savings Grant may contribute up to $3 for every $1 you put in. But how much it matches depends on your income level, and the amount you’ve already contributed.
An RDSP allows for a contribution up to $200,000 without impacting your disability benefits. This is also the case if you’re already withdrawing from your RDSP.
It is important to open this account as soon as possible. You can grow your account more, as it accumulates compounded interest over time.
How Does Contribution Matching Work?
If your income is at or below $95,259, the government will put in $3 for every $1 for the first $500 you contribute. For the next $1,000 you contribute, the government matches every $1 with $2. You cannot exceed $3,500 in contributions per year. The lifetime maximum is $70,000.
If you earn more than $95,259, you are granted $1 for every $1 you put in for the first $1,000 you contribute. Your maximum grant would be $1,000 per year. However, it is possible to be granted $3,500 in the first year and $1000 in the second, depending on your income tax filings for the previous two years.
Learn More Today!
RDSPs are one of the many products that we at FiduSure Financial provide. If you qualify, you can maximize your savings unlike anything else. We will make this process easy and expedient. Call us today at (647) 567-4702.