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). Four key points about RDSPs:
- Savings grow tax free in the plan.
- You can still get disability benefits.
- You can invest funds in an RDSP in a variety of investments, including GICs, stocks, bonds and mutual funds. For a full list of investments, visit the Canada Revenue Agency website.
- Until age 49, the beneficiary may be eligible for government contributions to the RDSP under the Canada Disability Savings Grant, and Canada Disability Savings Bond.
You can make lump-sum withdrawals at any time, with some additional rules regarding withdrawing bond or grant funds. The main function of an RDSP is to provide regular payments to the beneficiary, called lifetime disability assistance payments (LDAPs) no later than the year they turn 60. Learn more about receiving regular payments from an RDSP.
Speak to a financial advisor for advice related to investing in your RDSP, and making withdrawals.