Part C Three friends, Jenna, Michael Alice are debating whether an RRSP or a TFSA would be a better choice for them Each of them is the same age (e g 40 years old) and is saving for a goal that is 15 years into the future (retirement) Jenna has an income of $100,000, Michael has an income of $70,000 and Alices income is $40,000 After the target date, Jenna expects to have an income of $70,000, Michael expects to be earning about the same and Alice expects to be earning $70,000 Assume they planning to contribute $5,000, and they face different income tax brackets based on their income levels For example, the Federal Tax Rates for 2020 are as follows Federal tax rates for 2020 15 on the first $48,535 of taxable income, plus 20 5 on the next $48,534 of taxable income (on the portion of taxable income over 48,535 up to $97,069), plus 26 on the next $53,404 of taxable income (on the portion of taxable income over $97,069 up to $150,473), plus 29 on the next $63,895 of taxable income (on the portion of taxable income over 150,473 up to $214,368) , plus 33 of taxable income over $214,368 1 Provincially, the Ontario tax rates are as follows 5 05 on the first $44,740 of taxable income, 9 15 on the next $44,742, 11 16 on the next $60,518, 12 16 on the next $70,000, 13 16 on the amount over $220,000 2 Assuming they use the tax refund generated from RRSP contributions to re invest into their RRSP, which vehicle would be the best choice for each of Jenna, Michael and Alice Assume they live in Ontario and will earn the same return (e g 5 percent) in both vehicles Identify any assumptions made Your conclusions should focus on the reason(s) for selecting a RRSP or TFSA, including tax implications of a changing income level, and not just focused on calculations NOTE All of the analysis provided by you must be your own work and reflect your own original thought Do not provide any copy paste material, do not reference or provide citations for other material I want to receive your opinion, the results of your research and your own thoughts 1 Canada Revenue Agency (CRA) website Canadian Income Tax Rates for Individuals 2 Ibid

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Part C : Three friends, Jenna, Michael & Alice are debating whether an RRSP or a TFSA would be a better choice for them. Each

Part C: Three friends, Jenna, Michael & Alice are debating whether an RRSP or a TFSA would be a better choice for them. Each of them is the same age (e.g. 40 years old) and is saving for a goal that is 15 years into the future (retirement). Jenna has an income of $100,000, Michael has an income of $70,000 and Alices income is $40,000. After the target date, Jenna expects to have an income of $70,000, Michael expects to be earning about the same and Alice expects to be earning $70,000. Assume they planning to contribute $5,000, and they face different income tax brackets based on their income levels. For example, the Federal Tax Rates for 2020 are as follows:

Federal tax rates for 2020

15% on the first $48,535 of taxable income, plus
20.5% on the next $48,534 of taxable income (on the portion of taxable income over 48,535 up to $97,069), plus
26% on the next $53,404 of taxable income (on the portion of taxable income over $97,069 up to $150,473), plus
29% on the next $63,895 of taxable income (on the portion of taxable income over 150,473 up to $214,368), plus
33% of taxable income over $214,368[1]

Provincially, the Ontario tax rates are as follows:

5.05% on the first $44,740 of taxable income, +
9.15% on the next $44,742,
11.16% on the next $60,518, +
12.16% on the next $70,000, +
13.16 % on the amount over $220,000[2]

Assuming they use the tax refund generated from RRSP contributions to re-invest into their RRSP, which vehicle would be the best choice for each of Jenna, Michael and Alice? Assume they live in Ontario and will earn the same return (e.g. 5 percent) in both vehicles. Identify any assumptions made. Your conclusions should focus on the reason(s) for selecting a RRSP or TFSA, including tax implications of a changing income level, and not just focused on calculations.

NOTE: All of the analysis provided by you must be your own work and reflect your own original thought. Do not provide any copy/paste material, do not reference or provide citations for other material. I want to receive your opinion, the results of your research and your own thoughts.

[1] Canada Revenue Agency (CRA) website Canadian Income Tax Rates for Individuals

[2] Ibid.