Emily Mai who is 40 years old would like to retire at age 62. She is currently earning $150,000 per year in todays $s and would like to have 70% of that income per year during retirement. She expects to live till age 95. She is eligible to receive maximum CPP and OAS starting at age 65 in todays $s. Use 2012 values from table 17.4. She will receive an employer pension of $60,000 per year in nominal $s after she retires at age 62. She would like CPP to start after she turns 62, and OAS to start after she turns 65. For each month earlier than age 65 CPP starts she will lose 0.6%. Her marginal tax rate is 46%. She has $50,000 in RRSP now. She plans to deposit $5,000 per year in nominal $s into it each year until retirement. She will deposit tax refund on the RRSP contribution into a Tax Free Savings Account (TFSA). She expects to earn a real rate of return of 4% per year on her portfolio. Inflation rate is expected to be 2% per year. Assume deposits into the RRSP and TFSA are in nominal $s and are made at the beginning of the year. Savings in TFSA provide no income tax deduction, but the principal and income in TFSA are never taxed, even when withdrawn. Therefore, to make the TFSA comparable with other before tax values in this problem, multiply the accumulated TFSA value by 1.20 a. Does Emilys saving provide enough to maintain the standard of living she desires if she lives to age 95? If not, how much will be the value of the shortfall in retirement savings at age 62. b. How much more she contributes to her TFSA each year to reach her goal. Remember for each year maximum contribution allowed is $5,500.