Top 10 Mistakes People Make With Their RDSP And How To Avoid Them
Planning for long-term financial security is especially important for individuals living with disabilities and their families. In Canada, the Registered Disability Savings Plan (RDSP) is a powerful tool designed to support that goal. However, many people unintentionally make mistakes that limit the benefits of their RDSP. At Think Insurance we regularly help families identify and correct these issues. Below are the top 10 mistakes people make with their RDSP—and how to avoid them.
1. Not Opening an RDSP Early Enough
One of the most common mistakes is delaying the opening of an RDSP. Since government grants and bonds are time-sensitive, waiting too long can mean missing out on thousands of dollars.
How to avoid it: Open an RDSP as soon as eligibility for the Disability Tax Credit (DTC) is confirmed.
2. Missing Out on Free Government Money
Many RDSP holders fail to maximize the Canada Disability Savings Grant (CDSG) and Canada Disability Savings Bond (CDSB).
How to avoid it: Understand annual and lifetime limits and contribute strategically to receive the maximum matching grants.
3. Assuming You Need to Contribute to Get Benefits
Some people believe they must contribute to receive any benefit, which is not true.
How to avoid it: Low- or modest-income families may qualify for the CDSB without making any contributions. Think Insurance can help assess eligibility.
4. Not Coordinating RDSP With Other Financial Plans
An RDSP should not exist in isolation. Failing to align it with wills, trusts, or insurance plans can reduce its effectiveness.
How to avoid it: Work with professionals like Think Insurance to integrate your RDSP into a complete financial strategy.
5. Choosing the Wrong Investment Mix
Overly conservative or overly aggressive investments can both hurt long-term growth.
How to avoid it: Adjust investments based on age, risk tolerance, and expected withdrawal timelines.
6. Withdrawing Funds Too Early
Early withdrawals can trigger repayment of government grants and bonds from the past 10 years.
How to avoid it: Understand the “10-year rule” and plan withdrawals carefully with expert guidance.
7. Naming the Wrong Plan Holder
In some cases, parents or guardians remain plan holders longer than necessary, creating complications later.
How to avoid it: Review plan holder options early and transition appropriately when the beneficiary is capable.
8. Ignoring Beneficiary Eligibility Changes
If a beneficiary loses eligibility for the Disability Tax Credit, the RDSP can be affected.
How to avoid it: Stay proactive with DTC renewals and keep documentation up to date.
9. Not Reviewing the RDSP Regularly
Life circumstances, income levels, and government rules change—but many RDSPs are left untouched for years.
How to avoid it: Conduct regular reviews with a trusted advisor like Think Insurance to ensure the plan remains optimized.
10. Trying to Manage Everything Alone
RDSP rules are complex, and mistakes can be costly. Many people rely on incomplete or outdated information.
How to avoid it: Seek professional advice. Think Insurance specializes in helping families understand RDSPs clearly and confidently.
Why Professional Guidance Matters
An RDSP can be one of the most valuable financial tools available—but only if it’s set up and managed correctly. At Think Insurance, we focus on education, personalized advice, and long-term planning to help families avoid common pitfalls and maximize every available benefit.
Final Thoughts
Avoiding these common RDSP mistakes can mean the difference between limited savings and long-term financial security. With proper planning, timely contributions, and expert guidance from Think Insurance, you can ensure your RDSP works exactly as it’s intended—supporting independence, dignity, and peace of mind for the future.