After recently graduating from college with an advanced diploma in graphic design, Hannah Remillard knows launching her career will likely come with personal challenges.
For the 23-year-old, who was diagnosed with autism as a teen after a diagnosis of selective mutism years earlier, she says her main difficulties revolve around verbal communication and socializing with her peers.
“I could face financial challenges in regards to the limitations that I can experience,” she said in a recent interview via email.
“For example, at times I have become incapacitated due to stress and require extensive time to recuperate. This could impact my employer’s ability to provide the support I require.”
Remillard and her family started preparing for financial supports back in high school, when she opened a Registered Disability Savings Plan. Like a Registered Retirement Savings Plan, the RDSP is a long-term savings account where contributions grow tax-free until withdrawal. RDSPs are specifically geared toward supporting those with disabilities.
Those approved for the federal Disability Tax Credit are eligible for the plan, which allows them to also receive grants and bonds from the federal government that help with long-term savings.
Personal finance experts say it’s an underutilized tool they highly recommend for people with disabilities, especially among those whose challenges increase the likelihood of encountering financial barriers in life.
“I recommend others to open an RDSP if they’re able to afford even the smallest amount because the government rewards contributions generously,” said Remillard, who saves $125 each month to contribute to the plan.
“The idea is to make life more manageable when we face hardships with career changes, job security, aging, and/or medical ailments.”
An RDSP account holder, along with anyone who has their written permission, can put money into the plan until the year they turn 59. While there is no annual contribution limit, there is a lifetime maximum of $200,000.
Grants and bonds received from the government do not count toward the contribution limit. Those include the Canada Disability Savings Grant — money the government deposits into an RDSP to match contributions, with a maximum of up to $3,500 per year and $70,000 over the recipient’s lifetime, until the year they turn 49. Beneficiaries with lower family income receive more grant money than those with higher family income.
The government also deposits a Canada Disability Savings Bond of up to $1,000 a year, and $20,000 in total, into the RDSPs of low- and modest-income Canadians, with no requirement for the recipient to contribute money to receive support.