Registered Disability Savings Plan (RDSP)
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More information about the RDSP:
A registered disability savings plan (RDSP) is a savings plan that is intended to help parents and others save for the long-term financial security of a person who is eligible for the disability tax credit (DTC).
FAQ: Can I roll over money from my RRSP into an RDSP?
Yes! Primary caregivers can “roll” up to $200,000 of their Registered Retirement Savings Plans or Registered Retirement Income Fund to a Registered Disability Savings Plan. This immediately saves roughly up to $100,000 of income tax payable due now. Next, it allows the $200,000 to continue to compound tax-free. At just 5% per year, the funds will double in 14 years and triple in 23 years to over $600,000.
FAQ: How much money will the government commit to my RDSP plan and how much do I need to put in to match this contribution?
As a broad guideline for families with an income of less than $31,711, the government will commit $1,000 per year for 20 years. At 5% this will compound to over $50,000 in 30 years. And you do not make any contributions.
For families with an income of less than $95,000, willing to deposit $1,500 into an RDSP, the government will contribute $3,500 up to a lifetime maximum of $70,000. At 5%, this can easily compound to more than $500,000.
And for families with an income greater than $97,069, the government will match $1,000 for the first $1,000 deposited per year in an RDSP, up to a maximum of 49 years. At 5%, this can easily compound to more than $400,000.