I need to know what interest rates should be used pre and post retirement.

Since the question is asking for the today's dollar, as I know we have to use real rate*marginal tax rate.

I also want to know whether the marginal tax rate should be applied for every saving in each year.

For example, do I have to save $15,000*0.431= $6,465 for year 6-10 ?

Question 2: 16 marks Francis Navida Otero and Andrew Iamonaco have come to the office of Lopez Personal Planning to discuss their long-range retirement goals. They want to retire in 20 years. They have $10,000 in savings now and they are still paying off their mortgage. They also want to save money to help their son and daughter with post-secondary education. For the next five years while they finish paying off the mortgage, they can save $5,000 per year for daughter Alpha's education. She will start post-secondary at the start of year eight. In years 6 - 20 they can save $20,000 per annum because the mortgage will be paid off. They will allocate $5,000 of it in years 6 - 10 inclusive to savings for son Beta's post-secondary education. He is expected to start at the beginning of year 11. The rest of the savings go towards their retirement. They both will have good pensions, but they expect they will want to draw an additional $15,000 per year from savings for 30 years in retirement. They also want to take a world tour in their first year of retirement that will require an additional $100,000 on top of their pensions and the $15,000 annual draw from savings. All the dollar figures are in today's dollars. Planner Lopez notes that the current inflation rate is 1.3%, but to be cautious he assumes it will be 2% per annum in the future. They can invest their money at 8% nominal rate until retirement and then will be more conservative in their portfolio and earn 6% p.a. throughout retirement. Their marginal tax rate is 42.7% now. It will drop to 31% when they retire. Required To solve this problem, planner Lopez assumes all annual savings and all retirement expenses occur at year-end. The world trip has to be paid for at the start of the year. Pestano rounds all his answers to the nearest dollar. a) b) c) d) e) Organize all the information on a time line. (1 mark) What are their discount rates, pre- and post retirement? (1 mark) How much do they give Alpha at the start of her post-secondary education? (2 marks) How much do they give Beta at the start of his post-secondary education? (2 marks) Do they save enough with this plan to meet their retirement goal? (10 marks)