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FINC-3480-A-Personal Finance I
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Earnings
|
Amount
|
Note
|
Dividends
|
$800
|
From three companies for which she received additional company shares because of her dividend re-investment plan (DRIP). The three companies operate only in Canada and pay taxes at regular rates.
|
Dividends
|
$250 CDN
|
Canadian owned company with its sole operations in California on which no foreign taxes were paid.
|
Canadian Western Bank Common shares sold
|
$25,500 total sales proceeds
|
The adjusted cost base (ACB) is $22,000
|
Given the gross-up and dividend tax credit rates provided below, the best estimate of the federal income tax expense, based on the above earnings in a single year, is closest to:
Taxable Income
|
Tax Rate
|
Up to $47,630
|
15%
|
On the next $47,629
|
20.5%
|
On the next $52,408
|
26%
|
On the next $62,704
|
29%
|
Over $210,371
|
33%
|
Based on the above, the average tax rate (ATR) is closest to:
CPP: YMPE is $57,400 YBE is $3,500 and contribution rate is 5.1% for each employee and employer.
EI: Maximum Insurable Earnings for EI is $53,100 and the rate is 1.62% for employees.
Your financial planner, Frank Vasil, CFP® , advised you to start saving early in life for your retirement because of the power of compounding. He indicated that if you were to invest $3,200 at the of every year from your cash bonus that you could expect an average return of 11%, compounded monthly. If you were to retire in 30 years from now, how much would you have saved by then (approximately)?
Wilma’s husband, Fred, left her with $750,000 worth of insurance money. She is only 45, enjoys her job as a nurse and does not want to retire. What amount, approximately, will her $750,000 be when she retires at age 60 if the credit union pays her 3% per annum, compounded semi-annually?