Question 1: Concetta and her Spousal RRSP (2 marks) On January 31, 2022, the first year of her retirement, Concetta withdrew $12,000 from her spousal RRSP. In 2021, Lorenzo, her husband had deposited $10,000 to the spousal RRSP giving it a balance at the end of the year of $120,000. Concetta turned 64 on January 15, 2021, and Lorenzo turned 63 on December 24, 2021. Both Lorenzo and Concetta have a marginal tax rate of 40%. a. How much did Concetta receive when she made the withdrawal? b. How much income tax is owed by one or both?

Question 2: Patty and HBP, RRSP Contribution (4 marks) Patty started the year with $14,000 in her RRSP. On February 14, Patty made a $3,000 contribution to her RRSP. Her RRSPs earn 6% a year compounded monthly. On April 15, she withdrew $15,000 through the HBP. What effect, if any, does the withdrawal have on her RRSP tax deduction? Hint: Note that the RRSP earns 6% compounded monthly

Question 3: Spousal RRSPs (4 marks) Lynette and Brian are married and have three daughters. Lynette works as a Senior marketing manager and earns $150,000 annually while Brian works as a freelance consultant earning $75,000 a year. Lynette was contributing $8000 to a spousal RRSP for many years but stopped with a last contribution in 2020. Their eldest daughter started her four-year degree this year and the couple decided to withdraw $9,000 each year for the four years to help meet her education needs. Who will have to report the withdrawals as taxable income for each of the withdrawals during the four years of education?

Question 4: Retirement planning recommendations (5 marks) Aaron earns $6,667 (after-tax) per month as a professor at a local university. He also earns net income of $10,000 per month in each of March and April from his income-tax return preparation business. His major cash outflows include $3,000 for his monthly living expenses and $500 toward a car payment. Each year, Aaron spends $5,000 per month in July and August travelling. Aaron would like to retire in 15 years at age 60. At that time, he estimates he will be withdrawing $40,000 per year (in todays dollars) from his investments. Every year, Aaron makes a lump sum contribution of $12,000 to his Registered Retirement Savings Plan (RRSP). His RRSP account has grown to $63,710 and he currently has $84,000 in unused RRSP contribution room. Aaron has never contributed to a Tax-Free Savings Account (TFSA). When he switched banks almost a decade ago, Aaron set up a pre-authorized monthly transfer of $250 from his chequing account to his savings account to cover emergencies that may arise. This account has grown to $34,000. Now that he has paid off the mortgage on his $400,000 house, and has been offered tenure at the university, Aaron feels comfortable taking on additional risk to achieve greater growth on his retirement investments. What strategies and/or recommendations related to his cashflows, RRSP & TFSA would you suggest, to save for his retirement? Substantiate your recommendations and show all calculations and assumptions (if any). (Hint: Check cashflows and determine possible retirement savings (if any). Think about the features of both RRSPs & TFSAs, and whether he should use either or both for retirement savings)