Lois should save every penny of her income in her name, the planner says
Mark earns $370,000 per year. Lois earns $30,000. How can they use that big income disparity to their financial advantage? Mark is 55 years old and earns a base salary and bonus of $370,000 a year. Lois is 51 and earns $30,000 as a self-employed health care practitioner. The big disparity in their salaries presents Mark and Lois with some excellent opportunities to save on the family tax bill.
Mark is saving $5,000 a year to a DC pension plan, which his employer matches. Mark then contributes the remainder of his registered retirement savings plan room to a spousal RRSP for Lois. Both maximize their tax-free savings account contributions each year. “When reviewing the initial budget submitted, there is about $75,000 unaccounted for each year,” Mr. Ardrey says. This is income after taxes, savings and spending are accounted for. “This is a material amount.” When RRSP refunds and other tax items are accounted for, this quickly grows to more than $100,000 a year, he says.
Once they are no longer working, the planner assumes that Mark and Lois will shift the portfolio to a more balanced asset mix to reduce volatility risk. Based on the assumptions above, Mark and Lois have an 80-per-cent chance of success under the Monte Carlo simulation, the planner says.
Mark Lois Planner Rrsp Cent Mark Savings Name CPP Monte Carlo CFP
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