Question
2) Question 2 (6.5 marks) Fred Tran is looking for some advice on his retirement savings and has provided the following information regarding his income:
2)
Question 2 (6.5 marks)
Fred Tran is looking for some advice on his retirement savings and has provided the following information regarding his income:
|
| 2019 | 2020 |
| Employment income | $85,000 | $ 96,000 |
| Less: Registered Pension Plan contribution | (8,500) | (9,600) |
| Net employment income | 76,500 | 86,400 |
|
|
|
|
| Grossed-up dividends | 6,000 | 9,000 |
| Interest | 1,000 | 2,000 |
| Net rental income (loss) | (2,000) | 10,000 |
| Total property income | 5,000 | 21,000 |
|
|
|
|
| Taxable capital gains | 6,000 | 4,500 |
|
|
|
|
|
| $87,500 | $111,900 |
|
|
|
|
| Pension adjustment | $ 9,350 | $ 10,950 |
Freds unused Registered Retirement Savings Plan (RRSP) deduction room at the end of 2019 was $2,000.
Fred would like to know if there are any other tax-deferred ways to save for retirement other than RRSPs. Fred has heard of Tax-Free Savings Accounts (TFSAs) but doesnt know much about them.
Required:
- Calculate the maximum RRSP deduction available to Fred for 2020. (4.5 marks)
- Address Freds question regarding TFSAs by providing four comparisons to RRSPs. (2 marks)
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Offshore Finance And State Power
Authors: Andrea Binder
1st Edition
0192870122, 978-0192870124
