The Registered Disability Savings Plan RDSP is a long-term savings vehicle for people with disabilities that started in As more advisors are assisting families to open these plans, be aware of two specific points. In , the Federal Budget introduced new carryforward rules allowing qualified RDSP beneficiaries to catch up on government assistance to their plans. This assistance takes the form of a contribution-matching Canada Disability Savings Grant CDSG and a non-matching Canada Disability Savings Bond CDSB.

The CDSG and CDSB are based on family net income levels, and can be calculated back to , the past 10 years or date of diagnosis, whichever date is most recent. Help maximize RDSP carry forwards.

Mackenzie Investments offers five new funds eligible for RDSP accounts | The Insurance and Investment Journal

Rules also establish the level of family income that qualifies for CDSG and CDSB. The levels are indexed to inflation each year, so in order to benefit from the following calculation, clients must have family income that is below the annual threshold. The numbers illustrate the planning opportunity available to clients. Carryforward amounts are calculated from the highest to lowest matching level and go back to the furthest year first, allowing clients to maximize the benefits of these rules.

So the carryforward for a qualified beneficiary who opens up a new RDSP in can go all the way back to assuming the beneficiary was eligible then.

Mackenzie Investments enhances popular RDSP program with five new funds | Canadian Insider

This amount will then bring the RDSP account up to the same amount of CDSGs as would be in the account if the qualified beneficiary had received CDSG annually since 8 years. The carryforward again is allowed as far back as , 10 years or date of diagnosis, whichever is most recent. CDSBs do not require any contributions to the account.

Careful planning is necessary to ensure the CDSG is maximized for those beneficiaries who are trying to save as much as possible each year. Under the legislation, there can be only one active RDSP account per beneficiary. Human Resources and Skills Development HRSDC and Canada Revenue Agency CRA work together to monitor and enforce the rules for RDSPs, including the transfer rules. Feds improve, streamline RDSP.

In cases where the client already has an RDSP account, a transfer can be processed and the entire history of the account will move to the new account.

This requires that the old account be transferred over and then physically closed by the transferring company. In the meantime, no CDSG or CDSB will be paid to the new account. Retirement Resource Centre For the advisor who specializes in retirement planning.

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