Reference no: EM132954359

Yusef and Madina, age 50, are starting to plan for their retirement in 15 years. Yusuf works for a major bank and makes 100,000/year. His compensation package also includes a defined benefit pension plan which will give him an annual retirement pension of roughly $58,000. Madina works as a legal assistant and makes $40,000/year. She does not have any retirement benefits through her work. Yusef has been contributing the maximum amount that he can each year to a spousal RRSP in Madina's name and Madina has been maximizing her contributions each year into her personal RRSP. They have a surplus of $12,000 each year that they would like to invest. They do not have any other investments.

Problem 1: Which of the following recommendations would be most appropriate for this couple?

Option 1: Madina should open a TFSA account and focus on maximizing contributions into this account rather than her RRSP

Option 2: Madina should continue maximizing contributions into her personal RRSP and any remaining excess funds should be invested in a new TFSA account in Madina's name

Option 3: Yusef and Madina should open a new non-registered account, instead of a TFSA, and deposit all savings into this non-registered account each year

Option 4: Madina should contribute the maximum each year into her spousal RRSP