ARTICLES

Long-Term Financial Solutions for the Disabled

By Enabled Financial Solutions
Posted: Wednesday, February 17th, 2010

Long-term financial security is a problem for most people, especially for the disabled. The Registered Disability Savings Plan (RDSP) is a relatively new program that will compound your investments on a tax-deferred basis. In addition, if you qualify for the Disability Tax Credit (DTC), your RDSP may even receive an additional boost from the Canada Disability Savings Grant.

Enabled Financial was quick off the mark to applaud when legislation established the RDSP in 2007 and was delighted when the Bank of Montreal first offered the product to customers. Other banks followed and this year, you can even get RDSPs at Credit Unions, such as Coast Capital. Learn more about the RDSP by visiting the web site of Enabled Financial Solutions Ltd. at www.enabledfinancial.ca

Here is how it works:

1. If you are a resident of Canada under the age of 60, and are disabled or have a family member who is disabled, you should contact Enabled Financial to see if they can qualify for the Disability Tax Credit. This could mean a return on your income tax of up to $1500 per year!

2. Don’t spend that tax windfall. Let Enabled Financial guide you to take that $1500 and invest it in a RDSP.

3. If the RDSP beneficiary’s family net income is under $75,770 per year, you will qualify for additional money from the Canada Disability Savings Grant (CDSG). The CDSG from the Federal Government can be as much as $3500 per year! The maximum lifetime CDSG is $70,000. Eligibility for this grant ends on December 31st of the year that the beneficiary turns 49.

4. For those with a net income of less than $37,885, there may be additional relief in the form of a Canada Disability Savings Bond. The Federal Government issues the bonds for up to $1000 to add to your RDSP.

All of this means that, as a result of your visit to Enabled Financial, your savings could grow by a total of $5000 - $6000 each year, if the family member with a disability is under the age of 49 years of age. The bank could then invest for even more earnings in the RDSP. Remember, this investment is for the long term. If you decide to withdraw the government grants and bonds from the RDSP within 10 years, you have to pay them back to the government. After ten years, you can spend the money on anything you want. There are no limitations.

It’s always good to save; there is no annual limit to contributions to the RDSP, although there is a lifetime limit of $200,000. Of course, the smart consumer will want to leave room for the maximum available Federal grant money.

Enabled Financial, where our motto is Get Fi$cal About your Disability, can point you in the right direction to ensure you and your financial advisor can come up the best strategy and guide you through the process. Contact:

Linda Chornobay, Director Enabled Financial Solutions Ltd., 550-2950 Douglas Street, Victoria, BC Phone (250) 514-2699 Email: linda@enabledfinancial.ca

View All Articles by Enabled Financial Solutions

This article has been viewed 1008 times.