There are three major personal financial decisions that a typical family will have to take in the normal course of events; a house purchase; retirement; and financing/supporting their childrens education. Assume the following goals:

Accumulating a down payment of $20,000 for a house in 4 years.

Accumulating enough savings to finance a $40000 per year retirement in 35 years for the rest of their life.

Creating a fund of $60,000 to support their child(ren)s education in 20 years.

Without assuming support from any government policy/program, calculate the monthly savings the couple needs to make, to realize these goals, if the annual rate of return on investments is historically 5% per year.

How would your answer change if the annual rate of inflation is assumed to be 2% per annum and the family would like to keep the above goals in real terms by accounting for inflation?

How will the monthly savings goal be impacted if the family also has to pay off a Canadian mortgage of $400,000 over 25 years at an assumed average APR of 4%.