Majid and Mina are a couple living in Ontario. They have one child, a daughter named Hana.
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Question:
After speaking with you and learning about TFSA and RESPs, here are a number of objectives Majid and Mina have set for themselves.
They would like to come up with an optimum plan to take advantage of the government RESP grants. They are planning to contribute $60,000 of their savings towards Hana's education. They are asking if they should contribute a lump sum amount into Hana's RESP and let it grow in the account or contribute the amount gradually.
Majid and Mina also ask if there is a more tax efficient way to save money.
Their next priority after saving for Hana's education, is to develop a retirement fund in addition to their pensions.
Requirements:
Propose an optimum RESP strategy.
If funds, contributions and government grants, are deposited into the RESP at the beginning of the year, how much money will there be in Hana's education fund 7 years from now?
If retirement savings are deposited at the beginning of the year, how much money will there be in the retirement fund, 7 years from now?
Does it make sense for Majid and Mina to pay down their mortgage with their savings?
Develop a financial plan for Mina and Majid, based on the above requirements. Include any other suggestions that you have for them in case of their financial planning.
Related Book For
Income Tax Fundamentals 2019
ISBN: 9781337703062
37th Edition
Authors: Gerald E. Whittenburg, Steven Gill
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