It is January 1, 2021. Nicole Laverty is so excited after her first year working at her first job. She earned $50,000 in 2020 and because of the pandemic and living at home, she saved quite a lot of money. Now she can use what she learned in ADMS 2541 about what to do with the money. Her employer and she each contributed $4,000 to a defined contribution pension plan, which creates a pension adjustment of $8,000. Her marginal tax rate is 22% and her average tax rate is 14%. The inflation rate is 2%.

a. What is the maximum she can contribute to her RRSP? Answer

b. Assume she was able to contribute $1,200 to her RRSP and takes the tax refund she receives a month later and deposits it into her TFSA. How much would she contribute to her TFSA