Marty, age 56, and Marcia, age 53, are starting to think about retirement. Marty plans to retire at age 65 and he expects to live to age 85. Marcia plans to retire at age 62 and she expects to live to age 90. They estimate that they will need $58,000 per year, after-tax, in retirement to give them the lifestyle they want. Marty will receive an indexed pension of $30,000 per year, before-tax and Marcia will receive a small non-indexed pension of $7,500 per year, before tax, from a previous employer. Marty will receive a retirement pension of $1,100 per month from the Canada Pension Plan (CPP) and $600 per month in retirement income from the Old Age Security program. Marcia will receive a retirement pension of $400 per month from the Canada Pension Plan (CPP) and $600 per month in retirement income from the Old Age Security program. CPP and OAS payments are before-tax. CPP payments begin at retirement while OAS payments begin at age 65. They currently have $140,000 in RRSPs. For planning purposes, they are using a 7.5% nominal rate of return on savings before retirement and a 4.5% nominal rate of return during retirement. Inflation is expected to remain at 3% per year throughout their lifetime. The tax rate applicable to their situation is 25%. Please use the appropriate discount rate and mode (begin/end).

1. What is the after-tax present value, at retirement, of Marcias OAS retirement income?