Financial Details for Mary Killington

Chequing Account Balance - $975	Savings Account Balance - $6,750
Market Value of Home - $315,000	Market Value of Automobiles - $27,000
Personal Possessions - $10,500	Non-registered GICs - $13,500
TFSA mutual funds - $4,500	Car Loan - $8,500
Credit Card Balance - $10,000	Mortgage - $150,000
Student Loan - $8,500	Gross Salary - $5,200
Income deductions - $1,800	Car Loan Payment - $250
Mortgage Payment - $1,300	Property Tax Payment - $215
Life Insurance - $50	Car Insurance - $75
Utilities - $250	Phone & Internet - $125
Groceries - $400	Clothing - $50
Personal Care - $100	Gifts & Donations - $60
Student Loan Payment - $150	Parking - $35

3. Mary tells you the following three goals that she would like to achieve. Please restate each of the goals as SMART Goals. Be sure that the SMART Goals make sense for Marys financial situation. (6 marks)

a. I would like to buy a bigger house in a few years

b. I would like to pay off my car loan as soon as possible

c. I would like to save for retirement

4. Calculate Marys Marginal Tax Rate, total taxes owing on taxable income, and Average Tax Rate and answer thefollowing questions. Assume she has no tax deductions for the year. (10 marks)

a. Marginal Tax Rate

b. Total Taxes Owing based on Taxable Income

c. Average Tax Rate

d. Explain to Mary how she could lower her tax penalty with an RSP contribution of $10,000 this year. Be sure to show your calculations.

e. Explain to Mary the tax penalty of an RSP at the time of withdrawal.

f. Explain to Mary the tax benefits for investing in a TFSA as well as how much contribution room she would have remaining if she invested $12,000 in a TFSA this year (assume she is 35 years old and earned $500 in her TFSA).