RDSP: Peace of mind, powerful savings, and a more secure future

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An overview of RDSPs

Key benefits of an RDSP:

Save for the future with an RDSP

How it might work

Next steps

We all want the peace of mind that comes from knowing that the people we cherish most in life can live with dignity, self-worth, and financial security. A Registered Disability Savings Plan (RDSP) is like a pension plan for individuals living with a disability—the earlier you start, the longer your investment can grow, and the more confident you’ll feel knowing you have a plan in place for the future.

When it came to her retirement savings, Dalia*, felt she was on track. But she worried about her brother Caleb*, who is eligible for the Disability Tax Credit but hadn't built up any meaningful savings for his future. "I heard about the Registered Disability Savings Plan but had never taken the necessary time to help Caleb set up an RDSP," she shares.

Does that sound like you or someone you know? If so, you're not alone.

Relatively few eligible Canadians are taking advantage of this program. In 2022, a Canadian Survey on Disability (CSD) found that 27%—or 8.0 million—of Canadians aged 15 or older had one or more disabilities that limited them in their daily activities. In addition, on average, only 6% of Canadians living with a disability held RDSPs.

While there's no wrong time to open an RDSP, the earlier you start contributing, the more time your savings have to grow. Plus, taking advantage of the RDSP’s most powerful secret weapon—government contributions—can help increase your long-term savings by a startling amount.

An overview of RDSPs

You can open an RDSP and be the plan holder if you:

• Qualify for the Disability Tax Credit
• Are a person with a disability who has the capacity to manage your finances
• Are over the age of majority in your province and under the age of 60
• Have a valid social insurance number (SIN)
• Are a Canadian resident when the plan is opened

Who can open an RDSP on behalf of a person with a disability?

• A legal parent of a child with a disability who has not reached the age of majority
• A guardian or other representative who is legally authorized to act on behalf of a person with a disability

Key benefits of an RDSP:

• Anyone can contribute. Although there is a lifetime contribution limit of $200,000, contributions to an RDSP can be made by family, friends, neighbours, charities, foundations, and organizations, provided they have permission from the plan holder. 
• There are no restrictions on how the funds are used. The funds from your RDSP can be used in any way you choose.
• Government grants and bonds. Access annual federal government grants and bonds to increase the return on your savings.
• Provincial government disability benefits are unaffected. The Manitoba government fully exempts RDSP income when determining eligibility for social assistance.

Save for the future with an RDSP

The federal government will pay a matching grant of 300%, 200%, or 100%, up to a yearly limit of $3,500 and a lifetime limit of $70,000, through the Canadian Disability Savings Grant. This amount is dependent on the beneficiary’s adjusted family net income and the amount contributed. Visit the Government of Canada website to see how the adjusted family net income is calculated. In addition, the government will pay up to $1,000 a year, and up to a lifetime limit of $20,000, to low-income Canadians with disabilities through the Canada Disability Savings Bond. No contributions have to be made to get this bond.

How it might work

Thinking back to Dalia’s brother Caleb, he received $11,000 in Canada Disability Savings Bond based on his previous year's entitlement and he made an additional deposit of $900. Under the Canada Disability Savings Grant, the Government of Canada gave Caleb $2,700, which meant he had a total balance of $14,600.

"My brother opened an RDSP in 2021. Because he is a low-income individual, he automatically receives $1,000 in Canada Disability Savings Bond every year. If he makes additional contributions to his RDSP, he will receive 300% in matching funds from the Canada Disability Savings Grant, based on his income,"

"It's been amazing because Caleb didn't have the guaranteed security a lot of our family has," says Dalia. "The RDSP is a wonderful government program that will help him save for his long-term financial needs."

Next steps

If you or your loved one qualify for the Disability Tax Credit, opening an RDSP may be a great option to provide a little extra peace of mind for your financial future. Speak with a deposit specialist to learn more and open an account today.