What will be the after tax annual income for metoo

Reference no: EM132171490

Question - IAMBEST will be in the 46% marginal tax bracket for the next 35 years. Every year she expects to have savings of $5,000 from her take home pay. She will save everything of this by putting it in an RRSP. The money in RRSP will be invested in a diversified equity portfolio earning a before tax rate of return of 6% p.a. At the end of 35 years she will retire and will use all the money in her portfolio to buy a 25 year annuity earning a before tax rate of return of 5%METOO will also be in the 46% marginal tax bracket. Every year he also expects to have savings of $5,000 from his take home pay. He has decided to invest his annual savings for 35 years outside an RRSP in a growth portfolio, growing at an annual rate of 10% per year. After 35 years he will also use all the money in his portfolio to buy a 25 years annuity earning a before tax rate of return of 5%.Assume that after retirement each one of them will be eligible to get maximum CPP and OAS per year as stated in Table 17.4. Use 2012 values.

a. What will be the before and after tax annual income for IAMBEST?

b. What will be the after tax annual income for METOO? Assume his average tax rate during retirement will be 32%.

Reference no: EM132171490

Questions Cloud

What viewpoint should be used to evaluate the project : Improvements at a congested intersection require that the government acquire the properties on the four corners: two gas stations, a church, and a bank.

Evaluate the efficiency-speed and accuracy of the storage : From the second e-Activity, evaluate the ease of use and efficiency of using both Windows and Unix file management systems.

How much should the railroad be asked to contribute : The state may eliminate a railroad grade crossing by building an overpass. The new structure, together with the needed land, would cost $1.8 million.

Internet activity analysis : Describe a methodology for examining Internet use history on a Windows PC. This should be a step-by-step description of a process.

What will be the after tax annual income for metoo : IAMBEST will be in the 46% marginal tax bracket for the next 35 years. What will be the after tax annual income for METOO

Discuss the alternative concepts that can be employed : Discuss the alternative concepts that can be employed when setting the discounting rate for economic analysis in the public sector.

Compare the available accessories : Compare and contrast the available accessories, potential for future upgrades, warranties, and available support of both the iPad and the Galaxy Tab.

Calculate the breakeven annual interest rate : A proposed bridge would cost $4 million to build and $180,000 per year in maintenance. The bridge should last 40 years.

Nuclear power offered the hope of being too cheap to meter : Nuclear power offered the hope of being “too cheap to meter,” and with emissions not a concern,

User Account

All Pages