Dominica Cruz, aged 40 likes her work and has no plans on retiring although she hears that people retire at age 65. She would like to receive Canada Pensions Plan (CPP) and Old Age Security (OAS) benefits on her retirement date She has a goal of retiring on 70% of her current pre-tax income. Dominica is a widowed mother of one 5-year-old daughter, Katrina. Dominca settled her husbands estate a couple years ago and all assets below are in her name alone. Shes currently dating and considering remarrying some time in the future. She would like to leave a legacy for Katrina if possible. Domincas late husband used to do all the investing so shes an investing novice and uncomfortable with taking too much risk but recognizes she has a long time horizon. She considers herself to be a moderate-risk investor.

Assumptions:

January 2023 Start of Plan year

Income of $180,000 (use softwares tax calculator)

Tax deductions are based on marginal tax rate

Current RRSP value $335,000 (assume no carry forward)

Current TFSA Value $160,000 (assume no carry forward)

Non-registered portfolio Value FMV $185,000 ACB $135,000

She owns a home worth $850,000 and has a mortgage of $225000 (5 year term 2.85%, 20 year am left) she spends $1700/m on mortgage payments

Other than her mortgage she spends $6500/m on lifestyle (food, heat, hydro, vacations etc)

Her Maximum RRSP contribution limit for 2022 is $29,120

Assume Canada Pension Plan (CPP) at age 65 is 85% of maximum and OAS at age 65 is 100%

Use FP Canadas guidelines for return expectations

Plan ends at age 95

Dominica has an additional $20,000 to invest towards her goals.

She would like 70% of pre-tax income in retirement ($180,000*.7) = $126,000

She has no work sponsored insurance benefits

She expects Katrina will go to college or university but no savings have been set aside for her education yet. Shes not sure if she wants to fund a 4 year plan or more but she doesnt want Katrina to go without. She thinks education will cost $10,000/yr in todays dollars

Feel free to make other assumptions in this plan, ie sells her home to fund retirement, length of education funded etc