Simple Retirement Planning Question

Alankayman · 1 December 2009 at 11:28PM

This is a hypothetical situation.

My client is 65 years old and has a significant portfolio of registered and non-registered assets - approximately $200,000 in an RRSP and $400,000 in an investment account with a bank-owned full-service broker. She makes no withdrawals from her RRSP, but does have any investment income earned on her non-registered portfolio deposited into her bank account. A significant portion of her assets are inherited. The overall asset allocation in her RRSP and investment portfolio is 70% fixed income, 30% equity. The Quebec Institute of Financial Planners has quoted the following rates for planning purposes in 2009/2010. The forecast for inflation is 2%, Cash and cash equivalents 2%, Fixed income 4%, Equities 8%.

1. Assume clients pension is cut by 30%. Estimate her gross and net income next year from all sources. Assume a combined tax rate of 35% for ease of calculation.In your estimation, will the client have enough after-tax income?
2. What type of pension does Ida have?
How is it possible that her pension could be reduced by 30%?
3. When will she have to collapse her RRSP? What options will she have with the assets held in her RRSP at that time? Identify one strength and one weakness of each option

Feel free to answer any or all these questions and hopefully we can discuss this further.

dunstonh · 2 December 2009 at 10:19AM

This is a UK site. The things you talk about are not relevant to UK residents. So, the chance of a response is unlikely. You may wish to try a local site.