Tyrone and Siobhan Yates

Tyrone and Siobhan Yates have been married for five years. They came to Canada from Bermuda on February 28, 2007 so Tyrone could complete his doctoral studies in Urban Planning. They have one son, Garrett. The family lives at 6547 Aston Martin Mews in Mississauga, Ontario L5N 7P6.

The familys birthdates are:

Tyrone, March 17, 1976

Siobhan: February 14, 1978

Garrett: December 25, 2016

Tyrone and Siobhan have provided their most recent Notice of Assessments to you that show that Tyrone has $22,985 in RRSP carryforward room, while Siobhan has $4,598 in RRSP carryforward room. Neither of the couple have a valid will or powers of attorney documents in place.

The couple have two goals:

First, they would like to retire when Siobhan turns 64. They would like to continue living the same lifestyle as they are now. They would also like to have an extra $23366 (in todays dollars) each year that they will use to travel.

Second, the couple would like to fund 100% of Garretts four-year post-secondary education. The total cost of the education is expected to be $20276 (in todays dollars) per year and education costs are expected to continue rising at an annual pace of 5%. Garrett is expected to begin his education when he turns 17.

Tyrone earns a gross annual salary of $156771 as the CIO for the City of Mississauga and generally gets cost of living adjustments each year to keep up with inflation. He gets paid biweekly. Siobhan is a pilot for WestJet and gets paid $144024 per year, also indexed to inflation. She receives her pay semi-monthly.

The couple currently have $25,000 in their joint chequing account. This account earns no interest. They have noticed that their account has been growing in value and every time it reaches $25,000, they transfer any balance that exceeds the $25,000 to their non-registered joint savings account, which currently earns 1.5% interest and has a balance of $42,000 in it.

The couple has one automobile, an SUV that is worth $25,000. When they purchased it in February, 2017, they paid $45,000 for it. It is unencumbered (has no debt against it). They expect to purchase a similar vehicle every ten years.

Tyrone has a TFSA that the couple uses to save money for Garretts education. It currently has $15,058 in cash in it. They contribute $200 per month to it and earn 1.5% interest.

Tyrone has a group RRSP which he contributes 6% of his salary to each year, through payroll deductions. His company will match 100% of his contribution to a maximum of 9% of his salary. Tyrones group RRSP has $127,983 currently invested in it with an asset allocation of 35% large cap Canadian equities, 50% U.S. equities, 10% international equities, and 5% global bonds. Siobhan joined her companys pension plan on January 2, 2008. She will be eligible to receive an unreduced, non-indexed pension when the sum of her age and years of service equal 95. Her pension benefit accrues at 1.5% of her income up to the YMPE plus 1.8% above the YMPE to a maximum of 50% of the last five years of her salary. The normal retirement age for the pension is 65, and for every year that the pension is taken early, there is a 5% penalty.

The couple own their home, which is currently valued at $1075965. Their only debt is their mortgage. They bought their house for $492,000 in August of 2012 using a $450,000 mortgage. Their current five-year mortgage rate of 3.50% is fixed until August, 2023, at which time they will choose a new term and rate when they renew their mortgage contract. They currently owe $364,451 on their mortgage and pay monthly payments of $2,500.

The couple have the following expenses each month:

• Housing costs, including utilities of $1,400.
• Food and housing supplies of $1,000.
• Transportation expenses of $1,500.
• Cable TV, internet, and cell phones of $500.
• Daycare expenses of $2,000 (payable to Dec 31 2029).
• Extra-curricular activities for Garrett of $500 (payable to Dec 31 2034).
• Social and Entertainment expenses of $1,000

The couple also have the following expenses each year:

• Property taxes of $8,000
• Travel expenses of $10,000
• The couples answers to their investment questionnaire are shown below. They expect to pay a 2% non-tax deductible annual fee for money management.

The couples answers to their investment questionnaire are posted separately. They expect to pay a 2% non-tax deductible annual fee for money management.

Kindly give a recommendation to include the following: Does the cover page include advisor contact information? 2. Did you check Goal Funding to ensure all accounts have been allocated to a goal? 3. Have you selected strategies to fund all goals? 4. Are the most appropriate accounts being used for each goal (consider taxes, estate, etc.)? 5. Have you selected the correct investor profile (based on the questionnaire) for each account used to fund a long-term goal? 6. Have you selected an appropriate rate of return for accounts used to fund short-term goals? 7. Are all goals 100% funded? 8. Have you used all available strategies to achieve the couples retirement goal (savings, deferring CPP/OAS, liquidation order, etc.). 9. If clients cannot achieve certain goals after you have implemented all possible strategies, what comprise do you suggest? Are these compromises reasonable, i.e., do they minimize tradeoffs? 10. Have any goals been vastly overfunded? If so, correct this. 11. Have all surpluses been swept into an account, including surpluses during retirement? 12. Have you established a deficit coverage strategy? 13. Have you ensured that surpluses/deficits on the cash flow report are zero for all years? 14. Have you maximized the estate value? 15. Do your recommendations use accurate figures drawn from the reports? 16. Are your recommendations clearly written such that a non-expert can understand? 17. Are your recommendations written in a way that establishes a relationship with the clients and encourages them to choose you as an advisor? 18. Did you include a Recommended Actions section? 19. Have you selected the Alternative Plan as the Recommended Plan (Proposed Plan in the reports)? 20. Have you generated the right reports, as specified in the assignment (proposed plan)? 21. Have you proofread your recommendations for grammar, organization, and typos? Recommendations must address the following: Asset class weightings, rate of return Networth: accounts that should be created and why) Cashflow: how deficits will be covered or surpluses invested Detailed recommendations on how the following goals are to be achieved (including funding strategies, dedicated accounts and an explanation as to why these strategies are optimal) o Retirement goal o Education Goal