"As long as the world shall last there will be wrongs, and if no man objected
and no man rebelled, those wrongs would last forever
~Clarence Darrow

Sunday, December 9, 2007

The RDSP In A Nutshell

So. I wanted to do one more post on the Registered Disability Savings Plan (RDSP). From my notes from the Disability and Estate Planning Seminar.

The way I understand it, the RDSP has a lot in common with both the RRSP and RESP. Its much more like the RRSP than I first realized. In fact, it appears to be very much like a RRSP for a person with a disability.

Before I go any further, let me state that the following is based on information I received at the Seminar on October 13, 2007. So it may have become subject to change since that time.

That being said, here is what I understand:
  1. I am not 100% clear on this and I'm not sure whether it has been definitively decided or not, but some at least are saying that no funds will be able to be withdrawn from the RDSP until the person reaches the age of 60 (or some other similar magic age).

  2. One of the really nice things about the RDSP however is that (much like the RESP), the government will match contributions made to the Plan. As I understand it, the first $1,570 contributed to the Plan will trigger a $3,500 contribution from the federal government.

  3. Depending on certain income guidelines, it could be possible that even in years where no contributions are made to the Plan, some amount of government contribution will still occur.

  4. The lifetime maximum contribution to the Plan (by individuals, not including the government grants) is $200,000.

  5. Subject to that lifetime maximum, contributions made to the plan until the disabled individual is 49 years of age will trigger government contributions.

  6. Subject to that lifetime maximum, contributions can continue to be made to the Plan until the disabled individual reaches the age of 59, but no government contributions will be triggered once the disabled individual is 50 years of age and older.

  7. If the disabled individual starts withdrawing money from the Plan within the first 12 years after the Plan is created, she will be required to start paying back some of the government contributions.

All that being said, I probably can't do much better than to point people back to Jack's blog. Off you go.

Update: I just went and checked out Jack's blog again myself. Most, but not all, of the above is accurate so you really do need to head over there to get the most up-to-date information.

Now, again, off you go.

**Once again, with grateful acknowledgment to Mr. Ken Pope and the Nova Scotia Downs Syndrome Society for 'bringing him to town'.

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