With respect to investments, RNS is committed to educating clients about the purpose of an investment in securing their future financial independence. This is best measured by the Wealth Stability Formula:

Wealth stability = cash + cash value/monthly expense - passive income (in months)

Passive income is income earned without the expenditure of any current time or effort, such as investment income or rental income. AtRNS, we coach clients to maximize their passive income because when passive income is greater than monthly expenses, we have the fortunate result of financial stability that can lead to financial independence. In this situation, the client has no need to access any of their net worth resources.

At RNS, investment coaching will always be directed at having the client’s passive income continuously exceed their monthly expenses. Additionally, we will always focus on investment for future educational costs (RESP), retirement (RRSP), first-time home purchase (RRSP) and first-time business ownership.

 

 

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The Registered Disability Savings Plan (RDSP) is an investment tool helping people with disabilities plan for their future. There are many advantages to the program including a number of grants and bonds that participants can receive

RDSP.

A registered disability savings plan (RDSP) is a savings plan that is intended to help parents and others save for the long term financial security of a person who is eligible for the disability tax credit. Contributions to an RDSP are not tax deductible and can be made until the end of the year in which the beneficiary turns 59.
The Canada disability savings grant, the Canada disability savings bond and disability tax credit provided by the Canadian Government allows for participants of the program to save even more.

How it Works

Canadian Savings Disability Grants match contributions to the RDSP account between 100-300%, depending on Family income, up to the age of 49.  i.e. if income is higher than the CSDG threshold amount $1,000 gets $1,000, if it is lower, $1,500 gets $3,500 in grants.

Canadian Savings Disability Bonds automatically get deposited to the RDSP account if the family income is less than the CSDB threshold amount, up to the age of 49.  This is to a maximum of $1,000/year and a lifetime maximum of $20,000.

CSDG & CSDB must remain in the account for 10 years to be vested to the beneficiary.Withdrawals from the plan must start at 60 and the investment growth and the CSDG & CSDB are taxed to the beneficiary upon withdrawal.

Income from the RDSP does not affect income-tested federal government programs such as Old Age Security (OAS), Guaranteed Income Supplement (GIS) or Canada Pension Plan (CPP). The RDSP is exempt as an asset for provincial programs like AISH, ODSP etc.  (except in Quebec, New Brunswick & PEI)

If you are under 60 years old and have a medical condition that entitles you to the disability tax credit, you may qualify for this non-deductible savings plan. Review the requirements to learn if you qualify for this incredible Savings Plan.

Qualifying for the RDSP Canada

Who Qualifies?

There are certain requirements that must be fulfilled before a person can invest in an RDSP, for both the beneficiary and the holder.

The Beneficiary:

  1. Must be eligible for the Disability Tax Credit (DTC) with a CRA approved Disability Tax Credit Certificate (For T2201);
  2. Must possess a Social Insurance Number (SIN);
  3. Must be a resident of Canada;
  4. Must be under the age of 60; age 49 or less to receive grants and bonds
  5. Must have only 1(ONE) RDSP at any given time.

The Holder

  1. For beneficiaries under the age of majority, holder must be a parent or legal guardian authorized to act on their behalf;
  2. For beneficiaries over the age of majority, holder must be authorized to act on their behalf;
  3. The beneficiary may open an account as the holder if they are personally legally able to enter into a contract.
  4. NOTE: A RDSP can have several holders throughout its existence and may have more than one plan holder at any given time.

Disabilities that Qualify for the Disability Tax Credit

The following is a list of some of the medical conditions that may entitle you to the disability tax credit (DTC) and other benefits. This list does not include every medical condition that may qualify for assistance.

  • Agoraphobia
  • ADHD
  • Alzheimer’s
  • Amputation
  • Anxiety
  • Arthritis
  • Asperger Syndrome
  • Ataxia
  • Autism
  • Bipolar
  • Bladder Disorder
  • Borderline Personality Disorder (BDP)
  • Bowel Disorder
  • Brain Tumour
  • Cerebral Palsy (CP)
  • Charcot-Marie-Tooth Disease
  • Chronic Pain
  • Chronic Obstructive Pulmonary (COPD)
  • Colitis
  • Coronary Artery Disease
  • Cri du chat Syndrome
  • Crohn’s Disease
  • Cystic Fibrosis (CF)
  • Deaf
  • Degenerative Disc Disease (DDD)
  • Dementia
  • Depression
  • Developmental Delay
  • Diabetes (Insulin Dependent)
  • Down Syndrome
  • Ehlers-Danlos Syndrome
  • Epilepsy
  • Fatal Alcohol Syndrome (FAS)
  • Fibromyalgia
  • Fragile X Syndrome
  • Glaucoma
  • Global Developmental Delay
  • Hearing Impairment
  • Herniated Disc
  • Hip Injury or Pain
  • Huntington’s Disease
  • Irritable Bowel Syndrome (IBS)
  • Juvenile Arthritis
  • Learning Disability
  • Lou Gehrig’s (ALS)
  • Mental Illness
  • Motor Vehicle Accident
  • Multiple Sclerosis (MS)
  • Obsessive Compulsive (OCD)
  • Osteoarthritis (OA)
  • Panic Disorder
  • Paraplegia
  • Paralysis
  • Parkinson’s Disease (PD)
  • Personality Disorder
  • Physical Impairment
  • Post Traumatic Stress (PTSD)
  • Psoriatic Arthritis
  • Psychosis
  • Quadriplegia
  • Rheumatoid Arthritis (RA)
  • Schizophrenia
  • Plus many more

Possible Obstacles in the Approval Process

The First:

As of January 2016, as a holder, you will have been legally authorized to act on the behalf of the person who will be the Beneficiary. For children, this is usually the parents or guardians. For adults, this requires that you have Trusteeship for this person.

The Second:

The name on the holder(s) and the beneficiary SIN card must match.  If not, this will delay the grants and bonds from going into your account.

The Third:

There is a lot of information published about RDSPs, not all of it relates to your specific situation. Some information sources report old or wrong information. Make sure that the information that you are referencing is from your province and relates to your specific situation.