Jeremy Wong started working for X Ltd. on May 1^st. 2019, after completing his studies at the University of British Columbia. Over the past two years he paid off his student loans and all his debts he had incurred while studying. For 2021, he has accumulated some savings and would like to start investing for retirement as he would like to retire at age 55. He has never invested in an RRSP but his girlfriend advised him to do so. He has come to you for advice on saving for retirement.

He has given you the following details of his income over the last three years:-

2019 2020 2021

Salary before benefits$125,000.$119,000.$112,000

Employee stock option benefits.. 5,000.. .... 3,000. 2,000

Interest benefit from the employer 2,000. 1,000.. 3,000

Registered Pension Plan contributions. 5,000 5,500 6,000

Interest income 1,000,,,,,,,,,,,,,, 1,000.. 1,000

Jeremy participates in his Companys registered pension plan. The pension adjustment reported by the employer over the three year period were $10,000 for 2019, $11,000 and $12,000 respectively for 2020 and 2021.

Jeremy has asked for advice on the following issues:-

1. What is the maximum amount he can contribute to his 2021 RRSP?

ii. What are the benefits to him for contributing to an RRSP?

iii. Is there any other saving options available aside from RRSP for retirement savings?

Required:-Advise Jeremy by:-

i. Calculating the amount of the 2021 allowable contribution he can make to the RRSP(13 marks)

ii. Listing and explaining four benefits accruing to him by contributing to an RRSP(8 marks)

iii. Explaining to him the option(s) available to him if he does not wish to save for retirement in an RRSP(3 marks)