I’ve been meaning to write about this all week, but for one reason or another, I couldn’t do it. Now I guess I’ll try.
For a while now, I’ve been thinking that I should probably be putting away some money in some kind of a savings plan. Hopefully before I’m 65, I manage to get a decent job. But if I don’t, I began to realize that as far as I know, all I’ll get is the Old Age Security money, which isn’t much. So I figure I’d better figure something out for the worst case scenario. But I was a big old chicken and figured if I plopped myself in front of a financial planner, they would laugh in my face considering I’m not exactly made of money.
Then, out of the blue, my mom read about some new program that the federal government had for folks with significant disabilities where, depending on their income, the government would either match or triple whatever contribution the person or their family made. My first reaction was utter disbelief. I figured there had to be a catch. first I thought it was only for those being taken care of by their families, and then I thought for sure they’d want to kno my parents’ income, and our taxes would become entangled in an ugly mess that would probably be more painful to sort out than it’s worth. So I wasn’t really jumping at the chance to sign up. Plus I wasn’t quite sure what it was called, so I didn’t want to walk into a random bank and say “Do you know anything about that disability savings thing where the government matches your contributions, er something? I just read about it in the paper.” I wanted to read up on it, but it’s hard to read up on something whose name you don’t know. So I didn’t really jump aboard super fast.
Mom was all gung ho about it and was asking her financial planner what he thought of this program. At first he didn’t have a flaming clue what mom was on about, but he figured it out and said it looked like something I shouldn’t miss out on. This got me thinkking. Now an independent financial guy who’s done stuff for 2 generations of our family thinks this is a good idea. Maybe I should look at it harder. Plus, now I had the name of it, it was called a Registered disability Savings Plan or RDSP. But I thought I’d missed this year’s deadline for starting one.
Then at the end of last week, I got a frantic call from dad saying the deadline had been extended to March 2, so if I moved fast, I could get in. I was sure I was screwed, since the application was 16 pages long, or so it appeared, and I was sure I would need to dig up supporting documentation. Government forms *always* need supporting documentation.
But I found out it wasn’t that bad. here’s how it works. To be eligible, you have to be a Canadian permanent resident and you have to have filled out a T2201 Disability Tax Credit form with your taxes at some point. If you were approved, then that’s all you need to qualify as having a disability. If you don’t know if you had that done or not, just talk to the person who does your taxes or call Canada Revenue Agency directly and they’ll let you know. Then you fill out this big form, and apply for the government grant which makes it so they will ad contributions when you make contributions up until the end of the year when you turn 49. How much they add depends on your income. You can also apply for the bond, which means as long as your income is below $21000, the government will put in a grand each year. Once you apply the first time for the grant and the bond, it will happen automatically either each time you add money to the account in the case of the grant, or at tax time in the case of the bond. After you’re 50, you can keep adding money, but the government doesn’t match your contributions anymore. You can start taking it out after you’re 60. When it’s time to take it out, your contributions are tax-free, but any grants, bond and investment earnings are taxed.
I didn’t even have to bring proof of income. they said they would get all of that through tax records. Kinda cool. You can only open an RDSP at certain banks. I believe right now, you can open them at Royal, Bank of Montreal, CIBC, and maybe Scotia, but I’m not sure. The person with the disability can open one themselves, or that person’s family can open one. I was so happy once I realized that my family didn’t *have* to open one on my behalf. Here’s the government page that has all the dirt on the program, including income breakdowns and places where you can open one.
Since Bank of Montreal was the first bank to jump aboard the train, I figured it would be safest to go with them. Here’s their page on how to open an RDSP. I got really excited when their webpage said I could do it right over the phone! I picked up the phone, called them, and asked to open an RDSP. The guy who answered the investment line said he’d love to do it over the phone, but since today was the deadline, I’d best march my butt into a bank branch and do it there. I was sad, but here’s where their customer service started to rock my socks off. He phoned two or three bank branches to ask if they could help me, and even asked them which branch was easiest to get to for a blind person, because I expressed a bit of concern about getting across a giant parking lot to the one branch where he wanted me to go. How awesome is that? I almost considered switching banks because this was beyond anything the TD phone people had ever done. I mean the TD tellers in the branches are cool, but the phone people are often times confused if you ask them for anything remotely complicated.
He phoned me back and told me which branch to go to. He told me to print off the application and take it with me in case they didn’t have it on file or something.
So, after printing a mass of paper, I went to the bank. I was worried that since this program was new, they might not know what I was on about. But the investment lady knew exactly what I was talking about, and was awesome about everything. She got all my paperwork filled out and tried her best to explain everything and answer all my questions. After giving her a void cheque from TD, we set it up so every month, a little money would be put in. She even made sure I’d have phone access so I could check on the status of the account. Not only that, but the next day, when I had more questions, I could call Bank of Montreal and they would actually give me her direct line! That would never happen at TD.
I just managed to get it open in time to make my contribution for 2008 but it was a tight squeeze. I asked if there was a specific time window when people had to open them, and she said no, that people can open them at any time and start making contributions for that year. So to any other Canadians with disabilities out there, there’s something to think about.