RDSPs - Much More Than Meets the Eye!
You know when you are thinking about yellow cars, you keep seeing yellow cars everywhere?
Recently, RDSP accounts have been top of mind. This is for a multitude of reasons, including a few friends and their children qualifying to open one, and a large presentation opportunity for our team.
An RDSP is a Registered Disability Savings Plan, it’s a way to plan for the financial future and long-term security of an individual in a tax-preferred way. As with many other programs that offer tax incentives, these accounts are complex in nature with many minute details that have large, long-term consequences.
No later than hours after a large presentation Chris and I did, we received a message from a friend of mine whose teenage daughter qualifies for the disability tax credit and subsequently, for the RDSP. She sent me a TikTok reel (channeling my inner Gen Z) that showed a professional speaking about $90,000 worth of government benefits for those who are disabled.
Sounds great, right? WRONG.
What was glossed over (not only in the TikTok reel, but also in subsequent social media posts)?
- Citizenship requirements
- Government grants/bonds are based on household income
- Approval of the Disability Tax Credit, which is independent of the RDSP provider
- Impact on complimentary government programs
- Impact of withdrawals
While I enjoyed watching RDSPs vaguely (and poorly) marketed on TikTok, my concern is that this program is a lot more involved than it was made to appear. “Clickbait,” as defined by Webster’s dictionary is “something (such as a headline) designed to make readers want to click on a hyperlink especially when the link leads to content of dubious value or interest.” While I can’t speak to the accuracy of TikTok clickbait, I can say that these TikToks most definitely did fulfill the definition of clickbait.
As with anything, it’s buyer beware. To a good financial future!
