Suppose you invest $7,000 today in an RRSP account earning interest of 5% per year. You will also invest any tax savings due to this contribution at the same time into this account. You plan to leave all of this money in the account for the next 35 years to save for your retirement.

You will not make any further deposits into this account. Once you have retired, you intend to take out the interest earned on the account at the end of each year. Prior to retirement, you will be in a 36% tax bracket. After retirement, you will be in a 21% tax bracket.

How much money will you be able to take out each year during your retirement?