Investing your RDSP
When it comes to starting a Registered Disability Savings Plan (RDSP), there is no shortage of things to keep in mind. The process could be longer for some than for others, but once the account is set up and the money deposited, the focus should then turn to investing the RDSP for the future.
An RDSP is a long-term savings plan
The first thing to remember is that the RDSP is a long-term plan, and grants and bonds could be subject to repayment if the money is withdrawn too soon. This means that most individuals who open an RDSP should have at least a 10 year time frame, and even potentially upwards of 20-30 years. The longer the RDSP is left to grow, the greater the benefits will be.
Keep it well-diversified
A well-diversified, professionally managed mutual fund portfolio that includes both stocks and bonds can be the best way to long-term investing success. A diversified portfolio helps you to be better positioned to ride out any market turbulence while still taking advantage of the long term growth aspect. Investors should resist the urge to park their money in low-yielding cash/savings products that often pay less than current rates of inflation, meaning their purchasing power will decline over time (think the cost of a coffee today versus 20 years ago).
Seeking advice from an Investment professional who can guide you through this process to try and maximize your investment gains is always recommended. They can also assist with ensuring that the RDSP fits within your greater financial and estate planning considerations.
By Trevor Philp, Senior Manager, Registered Products & Managed Solutions at BMO Global Asset Management
For more information on the RDSP, go to www.rdsp.com
If you would like to learn more about the RDSP in a small group info session led by the parent of someone with a disability, we are offering our next session in Vancouver on October 27 or a remote tele-seminar on November 16, 2016. Click here to register.