We all know someone with a disability. You may have wondered how you could help. Ask them if they have an RDSP, a Registered Disability Savings Plan. It is meant to help the disabled with financial support later in life, similar to an RRSP. Here’s a true story of one of our clients (with names changed).
Peter came to us as a referral. He is divorced with three kids, aged 18 to 22. The 22 year old, Jake, is autistic and still living at home. Clearly, ongoing financial support for Jake is a primary concern for Peter.
Like the vast majority of the 1.1 million disabled Canadians, Jake did not have an RDSP. To be clear, it’s not the easiest account to open. To begin, Jake needed to apply for the Disability Tax Credit with the help of his doctor. He also had to go back and file tax returns from previous years. In fact, Peter has shared with us that he doesn’t know how he would have navigated this process without us.
However, the benefits far outweigh the paperwork hassle. Peter opened the account in November of 2015 with a $1500 deposit. Over the next year, he deposited another $3000 for a total contribution of $4500. With all the paperwork in place, the account attracted government grant and bond funding – to the tune of $15,000! AKA Free Money!. Along with the investment growth, in a year and a half, the account is now well over $20,000, all from a contribution seed of $4,500. Peter is thrilled and relieved to know that with a bit of savings effort, Jake’s financial future can be secure.
Anyone within Jake’s world can contribute to help grow the account. Mom, Dad, Uncle's, Aunt's and so on. How powerful is it to know that for every $1 you contribute to someone you care about, the government will add possibly $3 more! (The grant and bond amounts vary depending on several factors including income of the disabled person, and contribution amounts etc)
As always, we are happy to answer any questions.