Larry and Tanya are thinking about contributing to an RESP for Samantha and have a few questions for you.

a. If Greta had already established a plan, can they open a new plan or continue to contribute to the already established plan? 

b. Can they deduct the contributions for income tax purposes?

c. What is the max CESG Samantha they would receive?

d. What happens if Samantha does not pursue post-secondary education?

 

2. If Greta continues making the same RESP contribution each year until Samantha starts school and Larry and Tanya decide not to save anything for Samantha's education within an RESP, how much will be in the RESP by the time she starts school, assuming that the investments within the plan earn 7.5% before tax? They would like to see how it was calculated.

 

3. If Tanya wants to sell the store, she will have to discharge her mortgage early. Interest rates on 2-year mortgages are 6.75% and the bank will impose a penalty using the interest rate differential approach. This year, she will reduce the principal by $7,000 through her regular mortgage payments. What penalty will Tanya have to pay to discharge the mortgage at the end of this year?

 

4. Suppose Tanya had a serious car accident, such that she suffers from amnesia and the doctors expect that it will take her the better part of a year to recover from her physical and mental injuries. What if Tanya became completely incapacitated today? How would it impact the business? Where would the family get income and how much? What would you recommend?

 

5. How much life insurance would you recommend for Tanya using the capital-needs Approach?

 

6. If Larry terminates his employment, he will lose his group health plan. What would you recommend?