Unlocking the Power of the RDSP

Planning for the long-term financial well-being of a loved one with a disability isn’t just a challenge. For many Canadian families, it’s a deep source of stress. Questions like “What will happen when I’m gone?” or “Will they have enough?” linger for years without clear answers.

There’s a powerful solution that many Canadians haven’t yet discovered: the Registered Disability Savings Plan (RDSP).

What Is an RDSP?

The RDSP is a savings plan designed specifically for Canadians with disabilities. Contributions are not tax-deductible, but investment growth is tax-deferred which allows more of your money to stay invested over time.Most importantly, the RDSP comes with substantial government contributions.

Who Can Open an RDSP?

To qualify, the beneficiary must:

• Be a Canadian resident
• Have a Social Insurance Number
• Be under the age of 60 when the plan is opened
• Be approved for the Disability Tax Credit (DTC)

Government Grants and Bonds

Canada Disability Savings Grant (CDSG)

This is a matching grant that can provide:

• Up to $3,500 per year
• Lifetime maximum of $70,000

For families earning less than $111,733, a $1,500 contribution is enough to unlock the full $3,500 grant. Families with higher incomes qualify as well, but larger contribution may be required to maximize grants.

Canada Disability Savings Bond (CDSB)

Lower-income families may also receive up to $1,000 per year in additional bonds, without needing to contribute anything!

Retroactive Contributions

You may be eligible to receive up to 10 years of unclaimed grants and bonds when opening an RDSP. This can result in a major boost in year one.

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What Kind of Growth Could You Expect?

Let’s look at an example:

A family with $110,000 in annual income contributes $1,500 per year. Each year, the government also contributes $3,500. Assuming a 6% net rate of return, $30,000 of contributions (i.e. $1,500 per year multiplied by 20 years) could result in $193,676 in accumulated savings.

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Additional Details:

• Grant and bond eligibility ends the year the beneficiary turns 49
• Withdrawals must begin by the end of the year the beneficiary turns 60
• Government contributions may need to be repaid if funds are withdrawn within 10 years of receipt therefore careful planning is important

We Can Help

If you or someone in your family qualifies for the Disability Tax Credit, we can:

• Confirm eligibility
• Open the RDSP on your behalf
• Assist with all required government paperwork
• Maximize your access to grants, bonds, and retroactive entitlements

Despite its generous benefits less than 35% of eligible Canadians currently use an RDSP (according to the Government of Canada’s 2023 RDSP Statistical Review). That means most are leaving money on the table. Let's fix that!

📩 Reach out to Endeavour Wealth Management today and let’s build a plan that Safeguard’s your family’s future.

Click Here to get started

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This information has been prepared by Ryan Secord who is a Senior Investment Advisor for iA Private Wealth Inc. and does not necessarily reflect the opinion of iA Private Wealth. 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 Advisor can open accounts only in the provinces in which they are registered.

iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.