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Disabled man in wheelchair by bus. (Photos.com)
Disabled man in wheelchair by bus. (Photos.com)

RDSP basics

How RDSPs work Add to ...

​The Registered Disability Savings Plan (RDSP) was established to help parents and others save for the long-term financial security of a disabled person (one who qualifies for the Disability Tax Credit).

The beneficiary of an RDSP can continue to receive federal and provincial disability benefits.

8 things to know about RDSPs

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  1. The beneficiary is the person with the disability who will receive the money in the future.

  2. The plan holder is the person who opens and manages the RDSP. The beneficiary can also be the plan holder.

  3. There is no annual limit on contributions but the lifetime contribution limit for a beneficiary is $200,000.

  4. Contributions can be made to the plan until the beneficiary turns 59.

  5. Contributions are not tax deductible, but your savings grow tax free. There is no tax on the investment earnings, as long as they stay in the plan.

  6. Until age 49, the beneficiary may be eligible for government contributions to the RDSP under the:

  7. RDSP savings can be held in a variety of investments, depending on where the plan is opened.

  8. The beneficiary must start taking regular payments from the plan by age 60.

Learn more about how RDSPs work.

Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca

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