Kelvin, aged 50, is planning for retirement. He expects to retire at age 65 and live 20 more years after retirement. The investment return on his MPF contributions has been stable at 2.5%. If everything happens as expected, his MPF will accumulate to a total of $1,500,000 at age 65. When he reaches age 65, he will withdraw the MPF money and invest the entire amount in a retirement plan which gives 3% investment return and provides monthly annuity income for 20 years.

For the purpose of tax saving and accumulating more retirement fund, he purchased a qualifying deferred annuity plan at age 50 which requires him to pay $65,000 at the end of each year, with a ten-year premium payment term. He opted to retain the money in the plan and receive the monthly annuity income starting at age 65 for 20 years. The estimatedrate of return is 3%.

Required:

1. Under what circumstances Kelvin may be allowed to withdraw his accrued benefits in the MPF earlier than 65years old? (3 marks)

2. Assuming Kelvin's tax rate is 17%, what is his annual tax saving amount if he pays his premiums as schedule? Briefly explain your answer. Show all your workings. (4 marks)

3. What is the accumulated amount of the qualifying deferred annuity plan when Kelvin reaches age 65? Show all your workings. Round your answer to integer. (4marks)

4. One of Kelvin's long term financial goals is to receive at least $20,000 total monthly annuity income for supportinghis decent retirement life. Is it attainable with reference to his financial data given and assuming everything happens as anticipated? Briefly explain your answer. Show all your workings. Round your answer tointeger. (5 marks)

5. Kelvin plans to create a trust. What is a trust? State any THREE reasons for setting up a trust. (4 marks)