James is 41 years old. He is planning on retiring at age 65 and he is expecting that he will die at age 95. He has been saving for retirement and currently has $300,000 in savings that is earning 6.25% per annum. He is adding $8,000 to his RRSP each year. James believes that he will need $41,000 (today's dollars) after tax in retirement to meet his expenses. This is in addition to his CPP and OAS. Assume that inflation is 2.5% and his ATR in retirement will be 25%.

What is the focal point? (1 mark)

How much does James need when he retires? (5 marks)

Will James have enough money to retire with his desired income? (2 marks)

What two recommendations would you give to James? Explain the benefits and drawbacks? (4 marks)