You have clients who are 30 and plan on retiring at the age of 60. They want
Question:
You have clients who are 30 and plan on retiring at the age of 60. They want to start taking their pension at the end of the year in when they turn 60. Based on family history, they believe they will live until the age of 85.
They are currently earning a combined annual income of $75,000 and their income will increase by 2.5% each year. They have calculated that their yearly pension during retirement is 70% of the annual income that they earned in their last year of working.
Determine how much they must contribute at the end of each year in their Registered Retirement Savings Plan (RRSP) in order to have enough money in their Registered Retirement Income Fund(RRIF).
They can expect to earn 4% per year on their RRSP and 1% on their RRIF.
Provide answers to the following:
Salary at Retirement
Annual pension income
The amount required in RRIF
The amount required in RRSP
Yearly RRSP contributions
If RRSP contributions are made at the beginning of the year and if they withdraw their pension payments at the beginning of each year they are retired, calculate “a“ through “e” again.
All work should be submitted in a word document.
Create a spreadsheet that shows the results when different values are introduced for variables.