The next section of the Action Financial Group Orientation Series will deal with Investment Account Types.
An account is not an investment; it is a container that holds one or more investments. Different containers have different features such as size, shape or colour, one hole in the bottom or none, a lid or no lid; different accounts have different features too, such as tax treatment, size limitations, or rules about contributions and withdrawals. Not all accounts are suitable at different life stages or circumstances and it’s always best to seek advice.
Registered Disability Savings Plan
A Registered Disability Savings Plan is another type of retirement plan offered specifically for those with a disability, and approved for the Disability Tax Certificate (DTC) by Canada Revenue Agency. It is a plan that is intended to supplement retirement income for those unlikely to accumulate other retirement savings due to their disability. Contributions can be made by anyone with the permission of the account holder.
Anyone under the age of 60 with a valid DTC is eligible to open an RDSP.
Contributions are not tax deductible. There is no annual limit on contributions but there is a lifetime limit on contributions of $200,000. There may be additional funds contributed by the government in the form of grants and bonds, depending on the financial circumstances of the beneficiary (after age 18) or their family (under age 18).
Taking maximum advantage of an RDSP requires careful planning of contributions in order to receive the maximum government benefits. RDSPs are complex, and this short description should be considered an introduction only. We hope the last several weeks have provided you with some knowledge that will increase your confidence around financial literacy.
You can always refer to our website www.actionfinancialgroup.com to review these topics. Stay tuned for our next topic!
Karin Rimnyak, Certified Financial Planner®
David Dryburgh, Certified Financial Planner®
Ian Barrie, Qualified Associate Financial Planner™
This information has been prepared by Karin Rimnyak who is an investment Advisor for iA Private Wealth. Opinions expressed in this email are those of the Investment Advisor only and do not necessarily reflect those of iA Private Wealth. iA private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.