Frequently Asked Questions
There has been a lot of discussion regarding the 10 year rule now that the RDSP is more than 10 years in existence. Can a person with a RDSP that has government from 10 years ago withdraw it?
The short answer; Yes, however, you will lose 3x what you withdraw up to what the government has put in during the last 9 years.
The RDSP is a long term savings plan for Canadians that qualify for the Disability Tax Credit (DTC). To collect money from this plan without losing any of the government money will take at least 30 years (retroactive grants and bonds can shorten this timeframe) so that all of the money is theirs. OR at 60, as this is when the account starts paying out.
Please contact us if you are unsure of how the 10 year rule works.
If I have a child that may not qualify for the Disability Tax Credit when they become an adult, is it even worth setting up a RDSP?
Definitely YES! Think of it this way, if you could borrow money without any interest so that you can earn investment income, wouldn’t you? Any grants and bonds that have been in the account for 10 years are yours to keep as well! Start a RDSP today to start collecting the money!
I do not have any money to put into the RDSP, should I still open one up?
Yes. Once the RDSP is open, there may be bonds that will go into the account without any deposits made by you. When the time comes that you can make a deposit into the account, then the grants will start matching. Even $25 a year will collect applicable grants.
I am now 50 and can no longer get any grants or bonds, is it still worthwhile to open a RDSP?
That depends. If you have not maximized your TFSA, this is usually a better registered plan to max out first and then put any extra into your RDSP. Unless you are receiving a provincial supplement like AISH or ODSP, where it is always better to fund the RDSP as it is an exempt asset.