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Amy and Sam are meeting with their Financial Planner, Finn Wong, today regarding their retirement. They are both 4 3 years of age and hoping
Amy and Sam are meeting with their Financial Planner, Finn Wong, today regarding their retirement. They are both years of age and hoping to retire in years. They have two children, age and They are unsure of how much money they will need to retire. They ask Finn to help them to make sure that they are on the right track to retirement.
Amy is a teacher in Toronto and earns a salary of $ annually. She is a member of the Ontario Teachers Pension Plan, which is a defined benefit pension plan. She started teaching when she was years old, and her pension will be based on her best five average salary and a factor. She is currently at the top of the pay grid and expects that her salary will keep up with inflation. Amy asks Finn if she is eligible to retire with her full pension in years if the factor on her pension is Once she starts to receive her pension it will be indexed for inflation.
Sam works for a candy company as a marketing manager. His income is $ annually. He has a group RRSP through his employer where he puts in of his salary and they match of his contributions. He has chosen to invest this money in a balance portfolio earning per year, compounded annually.
Sam and Amy would like to spend their retirement travelling twice a year and golfing. They estimate that a golf membership will cost them $ annually and their trips would cost them $ annually. Amy is also concerned with making sure that they are not a burden to their children in the event that they become ill. They are also planning on downsizing their home and they anticipate that they will have of the equity from their home for retirement.
Net Worth Statement for Amy & Sam Barrie
As of December of Last Year
Assets
House
Group RRSP
RESP
DBPP
TFSA Emergency fund in cash
Total Assets $
$
$
$
$
$
Liabilities
Mortgage
Line of Credit
Credit Card
Total Liabilities $
$
$
$
Net Worth $
Cash Flow Statement for Amy & Sam Barrie
As of December of Last Year
Income Annually
Sams Employment Income $
Less: Taxes, EI & CPP $
Amys Employment Income $
Less: Taxes, EI & CPP $
Less: Pension Contribution $
$
$
Total Take Home Income $
Expenses
Housing
Mortgage Payments
House Maintenance
Home Insurance
Utilities Heat, water, electricity
Property Taxes
Automobiles
Lease Payments Honda & Audi
Gas, Operating Expense & Repairs
Other Expenses
Phone, cable, internet
Food
Clothing
Entertainment & Vacation
Miscellaneous
Savings
Sams Group RRSP Contribution
RESP
TFSA
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Total Expenses $
Surplus or Deficit $
Assumptions:
Inflation
CPP Maximum $
OAS Maximum $
Amys Best Five Years average $
ATR in retirement
MTR in retirement
Nominal Return in Retirement
Life Expectancy Age
Requirements:
Based on their current spending, what do you estimate that they will need in the first year of retirement to cover both expenses and taxes.
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