Bill and Mary Robins are now both 55 years old and they have worked hard to increase their net worth by increasing assets and paying down debt. As a result they currently have no liabilities and Bill has grown his RRSP to $250,000 and Mary has $270,000 in her RRSP. They each contribute $1,500 per month to these plans and will continue to do so until their planned retirement at age 65. These registered plans are 25% income and 75% equity.
Both Bill and Mary also have a defined contribution pension plan with their employer’s which is worth $200,000 and $250,000 respectively. Their employers will continue to invest 6% of their gross salaries into these plans until their retirement, with contributions added yearly at the end of the year. Bill is currently earning $80,000 gross per year and Mary is making $95,000; they are both at the maximum salary for their positions.
In addition, they have a joint non-registered portfolio worth $125,000 which is allocated 50% bonds and 50% growth equities. This non registered fund currently has an unrealized capital gain of $50,000. This portfolio pays no dividend income. They expect this fund to continue to grow by 8% per year with half of this growth resulting from capital gains which would remain deferred until they sell the securities.
Their house is held in joint tenancy and they have designated each other as beneficiary on their RRSP and Pension Plans. The non-registered account is held in joint names with rights of survivorship.
REQUIRED – 50 marks
1. Assuming 6% annual compound growth, what will the value of Bill and Mary’s RRSP be at age 65? Using the same growth rate, what is the value of their pension plans? Show these amounts separately for both Bill and Mary. (4 Marks)
2. If they leave their asset allocation the same and continue to earn 6% per year after tax what annual income could they each pay themselves from their RRSP and Pension plans without encroaching on capital? (4 Marks)
3. If they convert their RRSPs to a RRIF what is the minimum payment required based on their age 65? What is the minimum if they wait to withdraw the funds at age 71? State the minimum as a percentage and annual dollar amount (2 Marks)
4. If they were both eligible to collect the maximum CPP and OAS at age 65, what would their gross individual retirement incomes if they withdraw 6% from the pension plans but defer their RRSP/RRIF withdrawals to age 71? (6 Marks)
5. If they both have a marginal tax rate of 43%, how much additional tax will they each pay on the annual interest income from the joint non-registered account. How much tax will they pay each year on the unrealized capital gains? The taxable income from this portfolio is split evenly between Bill and Mary. Please do the calculation based on the value on the non-registered account at their age 65. ( 6 Marks)
6. They would like to purchase an RESP for their grandchildren aged 2 and 4, and also create a TFSA for themselves. They are medium risk investors and they don’t expect the grandchildren to attend University for another 13 to 15 years. They also want to shelter as much tax as possible inside the TFSA. Please recommend two specific mutual funds for these objectives and explain why you are recommending these funds. ( 8 Marks)
7. If Probate fees in the Province of BC are .6% on estate assets valued between $25,000 and $50,000 and 1.4% for assets above $50,000, how much would the Robins estate need to pay if only Bill died at his age 65? Assume that Mary is the beneficiary of his RRSP and Pension Plan; and that the house and non-registered account is in joint names with rights of survivorship. Assume the value of the home on Bill’ death to be $800,000. (2 Marks)
8. How would these probate fees change if the estate was the beneficiary of Bill’s RRSP and Pension Plan and the principal residence was held as tenants in common as opposed to joint tenancy? What is the amount owed in this scenario? (6 Marks)
9. Is it important for Bill and Mary to name a guardian in their Will, if so why? Also, what are some important characteristics that their executors should have in the event that both Bill and Mary die at the same time? (6 Marks)
10. If the investment markets are performing poorly when Bill and Mary are both aged 85 years old and they are concerned about outliving their capital, what options are available to them to ensure a guaranteed income for life? What factors determine if these options are a good choice or not? (6 Marks)
Tesco is one of the UK's driving general stores, providing clients across the country with basic needs and a huge range of various administrations. In the past Tesco began as just a general store, nowadays they offer their clients protection, cell phones, and even electrical products. Tesco even offer their clients a reward framework where clients get a 1% return on their buys, this 1% returns to the client as a voucher which can be utilized as a part of a wide range of ways. Tesco, similar to a ton of UK grocery stores, is a major association including an assortment of frameworks, these frameworks help the organization in working at levels running from the operational level to official. It is the structure of these frameworks which enable the business to run adequately, to guarantee that the right choices are made and reports are ordered for powerful administration. This paper will examine the attributes of two of the center administration data frameworks that Tesco utilize and the manners by which they may apply them to their business. Exchange Processing Systems Exchange Processing Systems (or TPS for short) are key frameworks in any business, these frameworks are in charge of serving the operational level of an association. Cases of some TPS frameworks would include: Recording installments got for merchandise and enterprises. Setting orders for items or administrations. Pulling back cash at a money machine. TPS's are in contact with the clients constantly and if one somehow happened to bomb then it would be quickly obvious, if Tesco's till frameworks were to flop then the client would know about this promptly. This frameworks the colossal significance of these frameworks, while they may appear to be monotonous, they should at last be dependable. This implies albeit 100% dependability can't be ensured, the TPS should along these lines have the capacity to distinguish and adjust blunders. (Wikipedia, 2009. Exchange Processing System.) Be that as it may, not all exchanges are prepared quickly; there are two distinct sorts of exchange frameworks. Ongoing preparing frameworks process the exchanges instantly, this strategy stays up with the latest and data inside the reports will be reliably precise. Cluster preparing frameworks store the data in bunches and are handled at slower rates, this technique for handling implies that reports don't generally have cutting-edge data. Organizations requiring exceptional reports will decide on a continuous handling framework. (Bocji, P 2003 p238) Tesco will profit by these Transaction Processing Systems in different ways. These frameworks will hold and gather data about client buys, particularly the individuals who have a client steadfastness card; it will help with having the capacity to target different items at these clients to help build deals. Programmed joins with providers will be enhanced as stock can be re-requested when it has been sold, enormously decreasing the physical exertion of stock requesting and limiting the blunders required with manual requesting. More prominent adequacy of client benefit as costs can be adjusted effortlessly, a more noteworthy selection of items can be achieved and bring down costs to the client. Tesco utilizes TPS's in their EPOS frameworks (Electronic Point of Sale) these frameworks check standardized identifications and speak with the in-house framework. This in-house framework will record every one of the information of exchanges and stock which should be re-requested, most likely in a bunch framework which would then be able to be exchanged to the centralized computer by the day's end. This data will then be available to higher administration for producing reports and will give the dispersion focus orders for the next day. This data will likewise give requesting data to outsider providers. Choice Support Systems Choice Support Systems (or DSS) are the administration data frameworks went for supporting the administrative level. These frameworks give data, normally as specially appointed reports to help with basic leadership. The models bases that power DSS's shift from standard examination to complex numerical connections between factors in the information. DSS's are typically gotten to from a PC, enabling the director to issue the DSS programming orders and demand particular information. The yield from the DSS programming is more often than not in a straightforward content and visual arrangement, (for example, diagrams and graphs). DSS's are a blend of extraordinary models that assistance with data examination, anticipating and arranging. Organization execution information is additionally part of this combination. DSS are generally not a corporate framework and have a tendency to be all the more departmentally focused on, normally going about as a showcasing help. Typically DSS's are utilized as a master framework, for example, a specialist frameworks or information warehousing, in any case they are planned to be anything but difficult to utilize and should "coordinate over all levels in acknowledgment of the cover between operational, strategic and key choices". (Bocij, P 2003 p253) Master frameworks repeat the information and basic leadership abilities that an expert in a specific field would have. These frameworks are essential instruments in choice help; a great illustration would settle on a credit choice on regardless of whether to give somebody an individual advance. Information warehousing is a kind of business insight programming that examinations exchange data to upgrade an organization's intensity. The information distribution center itself is a monstrous database which contains an organization's deal data. Information mining is utilized as a part of relationship with information warehousing and is a robotized approach to discover designs in information. Information bunching can likewise be used with a specific end goal to discover connections between gatherings or bits of the information. (Wikipedia, 2009. Information Mining) DSS's can be utilized to make issues, directors can dissect the information when certain factors are changed, or taking a gander at various situations. A few kinds of the events include: Information Mining, as of now talked about. Objective Seeking Analysis, changing factors each one in turn until the point that a coveted objective is accomplished, doing this empowers the administrator to perceive what objectives should be set in particular regions of the business to achieve wanted outcome. Imagine a scenario where Analysis, similar to objective looking for investigation yet includes changing various factors immediately or changing a relationship inside the factors, while watching out for the adjustments in alternate factors. Advancement examination, to locate an ideal incentive for the factors given certain conditionals. Taking Tesco for instance you can expect that through Transaction Processing Systems, different information is gathered in the stores. This data is put away in the organization primary casing framework and can be gotten to by departmental administrators for them to create reports by means of master frameworks or information mining/warehousing. This empowers the chiefs to get data, for example, what number of clients appreciate eating chicken in contrast with the individuals who favor meat; this would then be able to be combined with data, for example, what different items the customer buys alongside these things. The supervisors at Tesco could then discover data about thing partiality, a procedure that would feature the probability of various things being bought together. This data is of extraordinary significance while considering what exceptional offers to put on, it could help in finding other reasonable items to put near these unique offers. (Data Management, 2006) The achievement of thing partiality is obvious by the narrative of the lager and diapers, it was discovered that men were purchasing diapers alongside brew on Friday evenings. This is an unordinary event that you wouldn't ordinarily anticipate; be that as it may, it was on account of information mining and thing partiality this was revealed. (The Register, 2006)>GET ANSWER