RDSP: Are You Missing Out on Government-Matched Savings?
Presented by Darren Devine, CFP®, CLU®, Financial Planner, Sun Life and President of Devine and Associates Financial Services Inc.
What if there was a registered savings plan where the government could contribute significantly more than you put in yourself?
For Canadians who qualify for the Disability Tax Credit, that opportunity may exist through something called an RDSP.
But a lot of families either don't know about it—or don't realize they may qualify.
Hello, and welcome to Money Monday, where we help simplify your financial journey.
I'm Darren Devine, Financial Planner with Sun Life and President of Devine & Associates. I’ve been helping families across Ontario plan, protect, and enjoy their retirement income for over 20 years.
Today, we're talking about the Registered Disability Savings Plan, or RDSP—and why it's worth knowing about if you or someone in your family is eligible for the Disability Tax Credit.
So, let's break it down.
WHAT IS AN RDSP?
An RDSP is a registered savings plan designed to help Canadians who are eligible for the Disability Tax Credit save for their long-term financial security.
You can think of it as a long-term savings vehicle with some unique government incentives attached to it.
And that's where things get interesting.
THE GOVERNMENT MAY CONTRIBUTE TOO
Depending on family income and how much is contributed, an eligible beneficiary may receive the Canada Disability Savings Grant.
The government can provide matching grants of up to 300% on eligible contributions, with a maximum grant of $3,500 per year and a $70,000 lifetime limit.
There's also the Canada Disability Savings Bond for lower-income Canadians.
And here's something important: you don't necessarily have to contribute to receive the bond.
An eligible beneficiary may receive up to $1,000 per year, to a lifetime maximum of $20,000, depending on family income.
WHY ELIGIBILITY MATTERS
This is where the Disability Tax Credit becomes so important.
To be the beneficiary of an RDSP, you generally need to be approved for the DTC.
And don't automatically assume you aren't eligible just because you don't think of yourself—or your family member—as having a disability.
DTC eligibility is based on specific criteria around how an impairment affects everyday functioning, so it's worth understanding the actual rules rather than ruling yourself out based on the name alone.
THERE ARE RULES TO UNDERSTAND
Now, an RDSP is designed for long-term savings, and there are rules around contributions, grants, bonds and withdrawals.
That means this isn't simply free money you can deposit and immediately withdraw.
The timing matters.
Eligibility matters.
And how the RDSP fits into the person's broader financial picture matters too.
So if you or someone in your family qualifies—or may qualify—for the Disability Tax Credit, don't overlook the RDSP.
There could be government grants and bonds available to help build long-term financial security.
And sometimes, the first step is simply finding out what's available to you.
If you'd like to learn more about RDSPs and how they work, reach out to our team at Devine & Associates.
We'll be happy to help you start the conversation.
Thanks for tuning into Money Monday. Don’t forget to like and comment for more episodes filled with tips to help make your financial journey a breeze. Until next time, I'm Darren Devine, and you can always talk to us today at DevineAndAssociates.ca!
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