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The RDSP, like most other tax-related investment vehicles, is complicated.
And this segment is going to talk about exactly how it works.
And the one thing I want to emphasize, as you're listening to Adam through this, is:
speak to a financial security advisor, like Adam;
speak to someone in an institution, like your bank;
and get the advice of your doctor as you're moving forward to determine your eligibility
and know how the RDSP affects your current assets and how it works to the most of your benefit.
Thank you Steven.
So now we're going to talk a bit further about how the grants and bonds work.
First we're going to talk about 'The Canada Disabilities Savings Grant'
The 'Canadian Disabilities Savings Grant' is phenomenal.
The great thing about it is there's different qualifiers for it.
You're eligible until Dec. 31st of the year in which you turn 49.
Now, as we alluded to before, there's about $90,000 of free money available
In the Canada Disabilities Savings Grant, that's the part that has $70,000 available to you;
and that is based upon the individual's net family income.
If the net family income is up to or equal to: $85,414: there is a grant of 3:1 on that.
So basically if you put in-- and then there's a grant difference of 200% on the next $1000.
Bring it all together. You put in $1,500: there'd be a grant of $3,500.
$1,500 becomes $3,500. That's amazing!
I don't know anybody who's consistently to deliver that return.
It's a couple hundred percent return... [snaps] Just like that!
Again, that's if your family income is up to or below: $85,414.
If it's over that, over $85,414, the grants are less.
They're 100% on the first $1000.
So basically: you put in $1,500.
Of that $1,500, the grant is eligible on the first $1,000. So you're going to get granted 100%, which is $1000.
Simply put. $1,500? Gonna give you a grant of $1,000.
Still, 66% return... or... grant.
Now if you look at the other fam-- the other... part of the grants the govt. has setup:
"The Canada Disabilities Savings Bond" That is where a grant of $20,000 comes into play.
That's the maximum that, lifetime, the government will give an eligible person for the "CDSB",
"The Canada Disabilities Savings Bond."
If the income is up to or equal to $24,863: the grant will be $1,000.
If it's between $24,800 - $42,700:
The government will give you $1000 reduced on a pro-rated basis between that amount.
And if it's over $42,707: no Disability Savings Bond is paid.
The income, again, is based on the family net income, if it's a minor.
If it's over 18, it's based on their family income. Individual or a spouse, combined.
Now, if we can move into how the RDSP works.
There's lots of different investment options we can do with the RDSP.
What I like to do is: sit down with the individual and take a firm look at the family situation
because everybody's different.
And you want to look at the best choices you can make for the individual, in their investments.
There's a whole myriad of options out there,
a whole myriad of different types of choices in where you want to make the investment choices.
Typically, this money is for long-term, minimum of 10 years.
Ideally, it's for long-term life. You don't want--
It would be best if you could let it grow and snowball bigger and bigger over the years.
So you might want to look at a nice- a nice portfolio.
We can talk about that, how it's done.
But, there's- there's equities, there's bonds, there's money market.
It all depends on the situation.
We'll have a thorough conversation, decide the best strategy for the entire family.
Now, we put the money into the RDSP and we contributed however much we contributed
it's grown to... whatever it's grown to over the years.
Say it's a couple hundred thousand dollars, if it's started when it's young,
and... you contributed $X-- a certain amount of money
and this investment vehicle has grown a couple hundred thousand dollars.
Or whatever it's grown to, the amount doesn't matter.
If it's in the RDSP, it's time to get the money out after you hit the age of 60.
Once you've gotten to that point, you have two choices to make:
You have what is called a "Lifetime Disability Assistance Payment"
or a "Disability Assistance Payment".
The difference between the two is the lifetime payments, the LDAPs as they're called, are recurring payments
that go to the benefi-- that continue until the beneficiary's death.
Essentially, it's an annuity specifically setup for people with disabilities.
Versus-- Now we take the other one, The Disability Assistance Payment, the DAP:
Those are amounts that the individual, or the family on their behalf... with their consent, will take out in lump sums.
The RDSP withdrawals are made up of: contributions, income & growth, and grants &--
[pauses] 'grants & bonds', excuse me.
These contributions are not taxable, but the growth is.
But it's taxable at the plan holders'... tax rate.
Now one thing to watch out for is what the Assistance Hol--
-- something called the "AHA" moment, that is the 'Assistance Holdback Amount'.
Now if you're ready to take the money out of the RDSP, you have to consider the 'AHA' moment.
The Assistance Holdback Amount, what this is: is the 10-year window we spoke of earlier.
Any payments that we made to the plan within 10 years previously
if there's a withdrawal set- if there's a withdrawal taken, that could target the 'AHA'.
What that will do is instigate a 'clawback' of those grants in the past 10 years.
If you speak with your -- with your advisor. If you speak with me.
We can figure how that is and how it effects you.
Because again, the point of the RDSP is the long-term savings of the disabled person.
And at that time, if you DO trigger the 'AHA' moment:
the only monies affected, of course, are the incomes and monies paid to you by the govt.
As I said before, with the LDAP option they can begin at any age-- any age up to 60.
But they have to start by the age of 60.
Of course once they begin, as they're like an annuity, they're going to continue until the beneficiary's death.
And as I said before, the schedule for the LDAP annuity payments,
the Lifetime Disability Assistance Payments, are based on a certain schedule, an annuity schedule.
If you want-- If the individual would like payments on a more... unique time-frame:
then they're going to use, as we said, the Disability Assistance Payments.
That are not as structured a payment plan.
They can be requested at any time, by the beneficiary or one of the account holders,
and then they will be sent to that individ-- to the beneficiary.
And these monies... The great thing about the RDSP is:
the RDSP is unlike the RESP, the Registered Education Savings Plan.
which is a phenomenal plan in itself.
That's used specifically for education, post-secondary education.
The wonderful thing about the RDSP is that it can be used for anything.
It can be used for... vacations... for purchasing homes... for education... or anything regarding that.
Essentially whatever the individual and their caregivers choose.
Thank you.
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