Brando Potter is a 47 year old entrepreneur and the sole owner of "Complete Brand Consulting Corporation", an extremely successful small Canadian qualified corporation. He has operated the business successfully for the past 15 years and has a salary of $90,000 per annum (each year). He feels the business is worth $415,000 if it were sold today and has estimated that the net worth of the business will grow by an average of 8% a year. He would like any ideas you have regarding tax planning and the benefits he could receive if he sold the business at retirement.

Nika, is 35 years old and works at State Capital Bank as a Marketing Manager. She earns

$72,000 a year and is a member of her company's defined benefit pension plan. She has been with the bank for five years and is quite comfortable in her position and feels it is quite secure. Nika and Brando want to start a family over the next couple of years and feel they will need to save $ 6,000 a year for future expenses.

Nika and Brando have unused RRSP contribution room of $30,000 and $70,000 respectively. Brando will continue to make the $20,000 contribution (as a lump sum in February) each year and Nika will continue her monthly contributions at the same rate as this year.

Nika gets some great benefits from working at State Capital Bank such as no transaction fees on her bank accounts, lots of benefits (80% dental coverage, family plan included), life insurance equal to one times her salary, and disability insurance to 70% of her take home salary. Brando does not have any health benefits, life or disability insurance.

Nika is a member of a non-contributory defined benefit pension plan that will pay her a pension at age 65 of 1.5% of the average of her last 5 years of salary, times the number of years she works with the bank. Nika plans on retiring at age 55. If she takes her retirement benefits earlier than age 65 she losses 5% per year. She expects her salary to keep pace with inflation estimated to be 2%.

Nika contributes $5,400 each year to her self-directed RRSP and will continue to do so until she retires. She would be happy with a yearly return of 6%. Brando is a risk taker and feels long-term he would like to see a return of 8% on his investments.

Payment at the retirement phase

Nika:

Current age: 35,

Retirement planning age: 55

Interest rate: 6%, Inflation rate: 2%

Unused RRSP: $30,000

Contributing: $5400

Expects to live till the age 90.

Expects a rate of return of 6%

Brando

Current age: 47

Retirement planning age: 55

Interest rate: 8%, Inflation rate: 2%

Unused RRSP: $70,000

Contributing: $20,000

expects to live till the age of 90.

expects a rate of return of 8%

The following most recent statements (from the previous month) were also provided.

Brando NikaJoint

Credit Union Chequing acct$7,000

State Capital Savings acct$ 6,200

State Capital Chequing acct$ 6,000

CIBC Canadian Balanced Fund-RRSP(5.6%)^*3,000

CIBC Canadian Equity Fund-RRSP(7.3%)^* 6,500

CIBC Canadian Resources Fund-RRSP (.34%)^*12,000

CIBC Money Market fund-RRSP(.58%)^*28,0007,500

State Capital GIC's - RRSP (1.5% interest) 12,000

Balance owing on Mortgage283,629

^* RRSP average annual returns over the last ten years.