Madison and John Jones, both age $40$ have come to see you, their financial plannerto develop a retirement plan. Madison works full time at an Accounting Firmearning $$96,000$ a year after taxes and deductions and John works full time as aSoftware Engineer earning $$128,000$ after taxes and deductions. The Jones$$ haveone child, Rebecca, who is $10$ years old. The Jones$$ have not yet put any savingsaside for Rebecca$$s post secondary education but would like to start.In addition, The Jones$$ live in a townhouse in Oshawa that is worth $$1$ million andhas $$260,000$ remaining on the mortgage which is on track to be paid off in $12$years. The Jones$$ also share a four year old Toyota SUV that is valued at $$28,000$and has no existing loan balance.Regarding retirement, the couple would like to retire at $65$ and want to ensurethey are on track towards a comfortable retirement which would require thecouple to have $1\mathrm{.}4$ million, combined in savings at age $65.$ Madison and John wereboth born in Toronto and have always resided in Canada. In addition, bothMadison and John have been employed full time since graduating from College atage $22$ with the exception of Madison taking a year off of work during hermaternity leave.Please keep in mind the following:The chequing Account balance is seen by the couple as an emergency fund, andtherefore they don$$t want it included in calculations for Retirement Income.The Jones$$ have an abundance of questions for you and have requested you todetermine if they$$re on the right path towards achieving their retirement goal.During the meeting, the couple has provided you with the following informationthat better captures their current financial situation.

Monthly Expenses $($Joint$)$:

Mortgage Payment: $$1600$

Home maintenance: $$300$

Utilities: $$280$

Property Taxes $$480$

Property Taxes $$480$

Auto Insurance: $$160$

Gas: $$360$ Food: $$1400$ Clothing: $$380$ Internet$/$Cell phone bills: $$260$ Dining out & Entertainment: $$560$ Vacations $$1,600$

Monthly Contributions to Registered Savings Accounts:Madison and John each contribute $$300$ per month their RRSP accounts.

Assets: $($Joint$)$Principal Residence: $$1,000,000$ SUV: $$28,000$ Chequing Account: $$18,000$ Savings Account: $($earning $2\%$ per year compounded annually$)$: $$240,000$

Debt $($Joint$)$Mortgage: $$260,000$Madison$$s AssetsTFSA: $$40,000($earning $2\%$ per year compounded annually$)$RRSP $$120,000($earning $2\%$ per year compounded annually$)$

John$$s Assets:TFSA: $$70,000($earning $2\%$ per year compounded annually$)$RRSP: $$140,000($earning $2\%$ per year, compounded annually$)$Assignment Instructions $$ Answer the following questions:$1.$ As the Jones$$ Financial Planner, are they on the right track to reach theirretirement goal? Using TVM Calculations, determine at the current savingsrate how close to the goal of $1\mathrm{.}4$ million at retirement the clients areprojected to achieve. $(3$ marks$)2.$ The Jones$$ are wondering what RRSP maturity option would provide themwith flexibility and the ability to maintain control over how their funds areinvested at retirement. Provide the Jones$$ with an overview on which RRSPmaturity option would best fit their needs and why. $($Your response shouldbe between $3-4$ sentences long$).(3$ marks$)3.$ The Jones$$ have questions about CPP$.$ Provide a brief explanation on whatCPP is and how one can be eligible for the maximum CPP benefit. $($Yourresponse should be between $2-3$ sentences long$).(2$ marks$)4.$ After reviewing the Jones$$ financial situation, provide a recommendation tothe couple that would optimize their retirement goal plan. Be sure toMODE P$/$Y C$/$Y N I$/$Y PV PMT FV

elaborate on how your recommendation would help them with achievingtheir retirement goals. $($Your response should be between $4-6$ sentenceslong$).(4$ marks$)5.$ In regards to saving for Rebecca$$s post secondary education, the Jones$$mention that they would like to have $$38,000$ for Rebecca in $8$ years and areunsure what the best course of action would be$.$ Using relevant conceptsfrom this course, provide the Jones$$ with a recommendation and explainhow this could help them achieve this goal. $($Your response should bebetween $3-4$ sentences long$).(3$ marks$)$Auto Insurance: $$160$Gas: $$360$Food: $$1400$Clothing: $$380$Internet$/$Cell phone bills: $$260$Dining out & Entertainment: $$560$Vacations $$1,600$