The Power of Registered Disability Savings Plan (RDSP) - 2016

The Power of Registered Disability

Savings Plan – 2016 Update

How to Turn $18,000 into $72,000 in

4 years?

Several assumptions in this

example:

Marty is a 7 years old boy with

prolonged physical disabilities,

diagnosed with this condition by

his doctor since the year 2008.

Photo Courtesy David Castillo Dominici /FreeDigitalPhotos.net

His doctor filled out the T2201 form,

his disability tax credit was

approved by the CRA on the same

year

Marty is living in a single family

with his mother., throughout all the

years, their family incomes are

always lower than the first threshold

on the CDSB table

(Click here to view the 2016 RDSP Income Matching Rates)

In 2016, RDSP account is setup,

mother as the account holder, Marty

as the beneficiary

To catch up the carried grants from

the previous years, his mother did

the following:

Illustration sourced from Mackenzie Investments

In the above example, Marty’s

mother redirect $18,000 of her

savings, which leads to $42,000 of

“Canada Disability Savings

Grants”.

Photo Courtesy David Castillo Dominici/FreeDigitalPhotos.net

But the benefits do not just stop

here, because there is also the

“Canada Disability Savings

Bonds”

This bond provides extra benefit

to low-income family, with up to

$1000/year.

(Maximum lifetime disability saving bonds per qualified individual $20,000)

In this example, from the year 2008

to 2019, government would deposit

another $12,000 savings bond into

his RDSP account,

which boost the RDSP account total

balance to be $18000+42000+12000=

$72,000

Rather than leaving the money in

a regular savings account, which

generate very little interest these

days,

Marty’s mother has successfully

turned her savings of $18,000 into

$72,000 in 4 years, a great milestone

in building up the long-term savings

for Marty.

Photo Courtesy David Castillo Dominici/FreeDigitalPhotos.net

Want To Know More?Please visit

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Disclaimer:

This presentation is for general information only and is

not intended to provide specific personalized advice

including, without limitation, investment, financial, legal,

accounting or tax advice. Every individual case may

differed from one another. Please consult an appropriate

professional regarding your particular circumstances.

Mutual funds and/or approved exempt market products

are offered through Investia Financial Services Inc.

(“Investia”). Insurance products are provided through

multiple insurance carriers.