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The Power of Registered Disability
Savings Plan – 2016 Update
How to Turn $18,000 into $72,000 in
4 years?
Several assumptions in this
example:
Marty is a 7 years old boy with
prolonged physical disabilities,
diagnosed with this condition by
his doctor since the year 2008.
Photo Courtesy David Castillo Dominici /FreeDigitalPhotos.net
His doctor filled out the T2201 form,
his disability tax credit was
approved by the CRA on the same
year
Marty is living in a single family
with his mother., throughout all the
years, their family incomes are
always lower than the first threshold
on the CDSB table
(Click here to view the 2016 RDSP Income Matching Rates)
In 2016, RDSP account is setup,
mother as the account holder, Marty
as the beneficiary
To catch up the carried grants from
the previous years, his mother did
the following:
Illustration sourced from Mackenzie Investments
In the above example, Marty’s
mother redirect $18,000 of her
savings, which leads to $42,000 of
“Canada Disability Savings
Grants”.
Photo Courtesy David Castillo Dominici/FreeDigitalPhotos.net
But the benefits do not just stop
here, because there is also the
“Canada Disability Savings
Bonds”
This bond provides extra benefit
to low-income family, with up to
$1000/year.
(Maximum lifetime disability saving bonds per qualified individual $20,000)
In this example, from the year 2008
to 2019, government would deposit
another $12,000 savings bond into
his RDSP account,
which boost the RDSP account total
balance to be $18000+42000+12000=
$72,000
Rather than leaving the money in
a regular savings account, which
generate very little interest these
days,
Marty’s mother has successfully
turned her savings of $18,000 into
$72,000 in 4 years, a great milestone
in building up the long-term savings
for Marty.
Photo Courtesy David Castillo Dominici/FreeDigitalPhotos.net
Disclaimer:
This presentation is for general information only and is
not intended to provide specific personalized advice
including, without limitation, investment, financial, legal,
accounting or tax advice. Every individual case may
differed from one another. Please consult an appropriate
professional regarding your particular circumstances.
Mutual funds and/or approved exempt market products
are offered through Investia Financial Services Inc.
(“Investia”). Insurance products are provided through
multiple insurance carriers.