Your investing questions, our clear answers.

Our response:

Registered Disability Savings Plans (RDSPs) are a type of registered plan that allow people with disabilities (who qualifies for the Disability Tax Credit) and their families to save for their future. Government grants add to your savings and your investments grow tax-free. Learn more about RDSPs.

Since an RDSP is a long-term savings plan, there are specific conditions about taking money out. Generally, money can be withdrawn from an RDSP anytime by the person who manages the RDSP, but with some very important exceptions and restrictions. There are two basic ways to make withdrawals from RDSPs:

1. Make lump-sum withdrawals – called disability assistance payments (DAPs). Subject repayment rules (the assistance holdback amount), depending how long money from government grants and bonds have been in the plan, and tax consequences.
2. Set up regular payments – the beneficiary must begin receiving regular payments, called lifetime disability assistance payments (LDAPs), no later than the end of the year they turn 60.

Learn about these two options from the Canada Revenue Agency. For information on either of the above, and how the rules apply to your plan, contact your financial institution or a registered financial advisor.