RDSPs SHOULD BE
NO SECRET
– By Brian Weatherdon, MA, CFP, CLU, CPCA
Registered Disability Savings Plans
are secret – but they shouldn’t be.
I f people knew what we have here, they’d be embracing
this opportunity to expand savings and resources for so many
children and adults who can qualify today.
RDSPs offer enormous advantages. For households that
are low-income, middle or high-income, singles or families,
RDSPs open a wealth of opportunity we can design uniquely
for each situation. As we briefly touch the surface here,
you can reach us for further help. Even more important in
pondering this, don’t only think about “WHO” could use
this (ie. the person with a disability) or “WHAT” (ie. nature
of the disability) but dive deeper into “WHY” which is the
difference available here in the life of a person and their loved
ones. Plus, who wouldn’t rejoice to accelerate their life
savings with rich government grants and tax-sheltering.
Our RDSP beneficiaries have ranged
from infancy to boomers.
Canada Disability Savings Grants and
Bonds add up to a further $70,000
(grants) and $20,000 (bonds) until the
year a beneficiary turns 49.
To age 17, grants and bonds depend on parents’ income. After
that, they depend on income of the beneficiary alone (and
spouse, if applicable).
Sadly, many have never applied even though they could
qualify for Disability Tax Credit and the RDSP. Good news
is, applying can open a floodgate of new money. If someone
would have qualified over the past ten years but failed to apply
until now, they can seek carry-forward grants up to $35,000
and bonds up to $10,000.
By contacting me directly or visiting my website (www.
GuaranteedIncome4Life.ca), we offer two links with further
information on how to draw income as well as preserve any
other income-tested federal programs (CPP, OAS, GIS, GST
credits, social assistance benefits). Be aware also, there are a
few procedures to follow if a beneficiary dies or overcomes
their impairment.
To open an RDSP one must be eligible for the Disability Tax
Credit (ie. severe and lasting physical or mental impairment)
starting anytime until the year we turn 60. Owner(s) may
be the beneficiary personally who is at least 18, or any family
member(s) legally recognized to act for the beneficiary.
Deposits can range from just $1 up to a maximum $200,000. A story or two can show how RDSPs may
Surprisingly this can even include tax-deferred transfers from help families of any income-level:
RRSPs, RRIFs, RPPs of parents and grandparents.
Jane and Jack are young parents with a handicapped daughter
named Jill. Family net income is under $30,000 so they
qualify for maximum grants (CDSG) and bonds (CDSB). If
they deposit only $1 into an RDSP, Canada will match that
with $3 of CDSG plus $1000 of CDSB for a net account
value of $1,004. That’s beyond amazing! In addition, if life
and
was so busy that they never applied until Jill was 10 years
old, the $1 deposit could attract a further $1,000 for all
the missed years for a total $10,000 of bonds, and suddenly
www.GuaranteedIncome4Life.ca
reach $10,004. That’s beyond incredible, yet it’s true!
Sustaining Income
Retirement Lifestyles
Brian Weatherdon
CERTIFIED RETIREMENT COACH
CERTIFIED FINANCIAL PLANNER
(905) 637-3500 x 223
[email protected]
32
Lots more online! www.silvergoldmagazine.ca
With child tax credit or family gifts, imagine if Jill’s family
were able to invest $100 a month into Jill’s RDSP. This
magically summons the power of federal grants and bonds
($4,500 per year). In ten years averaging 6% growth, Jill’s
RDSP can exceed $200,000 – a vast sum compared to the
$12,000 total invested.