You are the financial planner and Charles & Emma have come to you for recommendations. Charles & Emma earn $100000 per annum now and estimate they need to have 50% of their current earnings a year after tax in retirement. Further, Charles & Emma now have $100,000 in their RRSPs and they would like to retire in 15 years when Cathy is 60. The investments in the RRSP grow at 5% annually. They imagine they will be retired for 30 years. They are concerned about their retirement and ask how much they will have to save each year from now until retirement to finance their retirement. They expect to receive $24000 a year before taxes from government programs and expect that their tax rate at retirement would be 20% of their income and a real return of 4% after tax.

a. How much do they need to have saved when they retire?

b. How much will their present savings grow to by retirement? 

c. What is their after-tax income from government programs in retirement and how much will this reduce their required savings by? 

d. How much do they need to save by end of every year till retirement? 

Answer rating: 100% (QA)

To calculate the answers to the questions well go step by step a To determine how much Charles and E... View the full answer