Retirement Planning- Case study Part 1 A) SMART Goal Setting Specific What: They should to achieve debt freedom and save enough money before age 65. They supposed to decrease his daily expense to save more money, to pay off the current loan and some credit debts. Then they need to start RESPs for their children. Why: Their Net cash flow was negative, it means they have more expense than income. They must find a way to solve these problem, even through they have 308879.63 net worth, but it is useless. They have too many loan and mortgage need to repayment. Where: They should focus on house mortgage first, because that $300000 mortgage with interest rate is 4.75%. Who: their children. When they do this financial planning, their kids is inherently involved in. Which: They have some constraints which is that they need to pay education for kids, they have economic pressure, so saving money is hard thing for them. Measurable: They want to save $2000 per month to pay off their mortgage $1897.57 monthly. Achievable: We suggest saving money from Entertainment and Transportation. · Yearly expense Travel $120, Activities $360, Alcohol $120 totally is $600 We also can decrease expense form car insurance, Colin and Jill can use one car and suspend the car insurance saving $1440 yearly. They already saving $2040 for one year. Realistic: That is realistic because they can easily to save money form their income, they need to know how to budgeting their money, especially they already have two kids. Time-Limited: They will save money form their daily life for $2040 for one year, their yearly mortgage is $1897.57*12= $22770.84, they need to saving 10 years money to pay off one year mortgage. B) Cash Flow Statement & Net Worth Statement According to the expense statement for retirement planning, I estimate the expense after Colin and Jill retirement is $28546.68. It means they need income after tax is same amount. Electricity/water: When they are after 65 year old, they should sleep so early that compare with before. That’s why their electricity usage rate is going down. Change $150 to $100 per month Internet: they don’t use internet after 65 years old, because they always watching TV or reading book, no time to use internet. Change $100 to $50 per month Groceries: it will change some because they want to be health, and will buy many nourishment and fruits，and more milk. Not changed. Eat-out: eat-out cost will be decrease, they usually cook at home. Change $100 to $50 per month Colin&Jill car insurance: They don’t need two cars for driving, so they can just drive one car with one car insurance, so the cost will be decrease. Decrease $110 per month Gas fee: gas cost also decrease because two cars in stead of one car. Medical： Colin has high blood pressure, his medicines cost will increase. Travel: Colin and Jill like to long-distance travel every month，so that’s why travel cost is increased. Change $50 to $ ...

1. Retirement Planning- Case study
Part 1
A) SMART Goal Setting
Specific
What: They should to achieve debt freedom and save enough
money before age 65. They supposed to decrease his daily
expense to save more money, to pay off the current loan and
some credit debts. Then they need to start RESPs for their
children.
Why: Their Net cash flow was negative, it means they have
more expense than income. They must find a way to solve these
problem, even through they have 308879.63 net worth, but it is
useless. They have too many loan and mortgage need to
repayment.
Where: They should focus on house mortgage first, because that
$300000 mortgage with interest rate is 4.75%.
Who: their children. When they do this financial planning, their
kids is inherently involved in.
Which: They have some constraints which is that they need to
pay education for kids, they have economic pressure, so saving
money is hard thing for them.
Measurable:

2. They want to save $2000 per month to pay off their mortgage
$1897.57 monthly.
Achievable:
We suggest saving money from Entertainment and
Transportation.
· Yearly expense
Travel $120, Activities $360, Alcohol $120 totally is $600
We also can decrease expense form car insurance, Colin and Jill
can use one car and suspend the car insurance saving $1440
yearly.
They already saving $2040 for one year.
Realistic:
That is realistic because they can easily to save money form
their income, they need to know how to budgeting their money,
especially they already have two kids.
Time-Limited:
They will save money form their daily life for $2040 for one
year, their yearly mortgage is $1897.57*12= $22770.84, they
need to saving 10 years money to pay off one year mortgage.

3. B) Cash Flow Statement & Net Worth Statement
According to the expense statement for retirement planning, I
estimate the expense after Colin and Jill retirement is
$28546.68. It means they need income after tax is same amount.
Electricity/water: When they are after 65 year old, they should
sleep so early that compare with before. That’s why their
electricity usage rate is going down. Change $150 to $100 per
month
Internet: they don’t use internet after 65 years old, because they
always watching TV or reading book, no time to use internet.
Change $100 to $50 per month
Groceries: it will change some because they want to be health,
and will buy many nourishment and fruits，and more milk. Not
changed.
Eat-out: eat-out cost will be decrease, they usually cook at
home. Change $100 to $50 per month

4. Colin&Jill car insurance: They don’t need two cars for driving,
so they can just drive one car with one car insurance, so the cost
will be decrease. Decrease $110 per month
Gas fee: gas cost also decrease because two cars in stead of one
car.
Medical： Colin has high blood pressure, his medicines cost will
increase.
Travel: Colin and Jill like to long-distance travel every
month，so that’s why travel cost is increased. Change $50 to
$100 per month.
Working out: Colin become fat when he 65, doctor suggest him
to get some exercise or activities.
Gifts: they brought gifts every holidays or grandsons’ birthday,
the gifts’ cost will be increase. Change $30 to $100 per month.
Clothes: they usually buy some kids clothes to their grandson
and granddaughter，so clothing cost increased. Change $50 to
$100 per month.
Gross income $100,000.00 $25,000.00 $2,083.33
RRSP deduction $3,600.00 RRSP deduction $2,400.00 $200.00
RPP deduction $10,000.00 RPP deduction $1,250.00 $104.17
$86,400.00 $21,350.00 $1,779.17
Gross Income $100,000.00 $8,333.33Gross Income $25,000.00
$2,083.33

5. Total tax deductions $43,227.56 $3,602.30Total tax decductions
$8,406.55 $700.55
CPP decductions $2,544.30 $212.03CPP decductions $1,042.39
$86.87
EI deductions $995.04 $79.59EI deductions $401.38 $33.45
Total income tax $46,766.90 $3,893.91Total income tax
$9,850.32 $820.86
$53,233.10 $4,436.09 $15,149.68 $1,262.47
29.29%
Mortgage $22,770.84 $1,897.57 0.31%
Home Insurance $240.00 $20.00 6.95%
$5,400.00 $450.00
0.93%
House Repairing $720.00 $60.00 0.77%
Painting $600.00 $50.00 1.54%
Appliance $1,200.00 $100.00
2.32%
Electricity /water $1,800.00 $150.00 1.23%
Gas $960.00 $80.00 1.54%
Internet&TV&homephone $1,200.00 $100.00 0.93%
Cellphone $720.00 $60.00
1.08%
Individually life insurance $840.00 $70.00 1.33%
Coli-Disability Insurance $1,034.28 $86.19 0.12%
Coli-Supplemental Life Inc $90.00 $7.50
23.15%
Groceries $18,000.00 $1,500.00 1.54%
$1,200.00 $100.00 0.77%
Take-out $600.00 $50.00 0.46%
Daily drink/coffee $360.00 $30.00
1.85%
Colin-car insurance $1,440.00 $120.00 1.70%
Jill-Vehicle insurance $1,320.00 $110.00 1.85%
Colin & Jill's Cash Flow Statement
Colin Jill
Gross income

6. Taxable Income Taxable Income
Income Expenses Annual Monthly Income Expenses Annual
Monthly
Colin Income Jill Income
Net Income Net Income
$68,382.78 $5,698.57
Percentage
Annual Monthly
Gas $1,440.00 $120.00 0.31%
Maintenance $240.00 $20.00 0.15%
Parking $120.00 $10.00 3.66%
Dodge Ram Loan $2,844.96 $237.08 4.15%
Mazda 3 Loan $3,226.32 $268.86 0.23%
Parking $180.00 $15.00 0.31%
Vehicle licensing $240.00 $20.00
0.42%
Griffin ,Lacrosse $324.00 $27.00 0.46%
Toy $360.00 $30.00
4.63%
Colin,RRSP $3,600.00 $300.00 3.09%
Jill, RRSP $2,400.00 $200.00
0.15%
Alcohol $120.00 $10.00 0.46%
Activities Tickets $360.00 $30.00 0.15%
Travel $120.00 $10.00
0.77%
Clothes $600.00 $50.00 0.23%
Laundry cleaning $180.00 $15.00
0.08%
$60.00 $5.00
0.39%
Hairdresser/barbers $300.00 $25.00 0.22%
Other(face cleaner) $168.00 $14.00
0.46%
$360.00 $30.00 100.00%
$77,738.40 $6,478.20

7. Total Net Income
Net Cash Flows
Expenses
Housing
Housing Maintain
Insurance
Groceries and Food
Child care
Investment
Entertainment
Clothing
Medical
Personl Care
Property Tax
Eat-out
Medicines
Gifts
Utilities
Transportation
Gifts
Total Expenses
($9,355.62) ($779.64)
Coli & Jill's Balance Sheet
Assets Liabilities
Curent Assets Current Liabilities
Household Asset
Net Worth
Quick Ratio
Bank Account( Joint) $3,400.00 Visa Card -joint $4,700.00
$3,400.00 $4,700.00
s
Coli-2014 Dodge Ram $21,995.00 $1,904.43
Jill-2015 Mazda 3 $20,495.00 Mazda Loan $268.86
$25,000.00 Dodge Loan $237.08
House $475,000.00 Home Morgage $300,000.00

8. $542,490.00 $302,410.37
Jill Group RRSP $15,000.00
Jill personal RRSP $12,500.00
Jill Personal TFSAs $3,500.00
Colin RRSP $31,200.00
Colin TFSAs $7,900.00
$70,100.00
$615,990.00 $307,110.37
$308,879.63
0.72
0.0115 1.468
Total current assets Total current liabilities
Total household assets Total long-term liabilities
Total investment assets
Long-Term Liabilities
Investment assets
Total Assets Total Liabilities
Current Ratio:
Debt to Asset Ratio:
House Mortgage
Possessions in the house
Retirement Expense
Expenses
Housing
Housing Maintain
Insurance
Groceries and Food
Investment
Entertainment
Clothing
Medical
Personl Care
Total after-tax retirement income=(46412.28 -3600-10000)*(1-
0.13)=$28546.68
Annual Monthly Percentage
Home Insurance $240.00 $20.00 0.52%

9. $5,400.00 $450.00 11.63%
House Repairing $720.00 $60.00 1.55%
Painting $600.00 $50.00 1.29%
Appliance $1,200.00 $100.00 2.59%
Electricity /water $1,200.00 $100.00 2.59%
Gas $960.00 $80.00 2.07%
Internet&TV&homephone $600.00 $50.00 1.29%
Individually life insurance $840.00 $70.00 1.81%
Coli-Disability Insurance $1,034.28 $86.19 2.23%
Coli-Supplemental Life Inc $90.00 $7.50 0.19%
Groceries $18,000.00 $1,500.00 38.78%
$600.00 $50.00 1.29%
Daily drink/coffee $720.00 $60.00 1.55%
Colin & Jill -car insurance $1,200.00 $100.00 2.59%
Gas $960.00 $80.00 2.07%
Maintenance $240.00 $20.00 0.52%
Parking $120.00 $10.00 0.26%
Vehicle licensing $240.00 $20.00 0.52%
Colin,RRSP $3,600.00 $300.00 7.76%
Jill, RRSP $2,400.00 $200.00 5.17%
Activities Tickets $600.00 $50.00 1.29%
Travel $1,200.00 $100.00 2.59%
Clothes $1,200.00 $100.00 2.59%
Laundry cleaning $180.00 $15.00 0.39%
$600.00 $50.00 1.29%
Hairdresser/barbers $300.00 $25.00 0.65%
Other(face cleaner) $168.00 $14.00 0.36%
$1,200.00 $100.00 2.59%
$46,412.28 $3,867.69 100.00%
Property Tax
Eat-out
Medicines
Gifts
Utilities
Transportation

10. Gifts
Total Expenses
Sheet1 Colin & Jill's Cash Flow
Statement ColinJillGross income $100,000.00Gross income
$25,000.00$2,083.33RRSP deduction $3,600.00RRSP deduction
$2,400.00$200.00RPP deduction $10,000.00RPP deduction
$1,250.00$104.17Taxable Income $86,400.00Taxable Income
$21,350.00$1,779.17Income Expenses Annual Monthly Income
Expenses Annual Monthly Colin Income Jill Income Gross
Income $100,000.00$8,333.33Gross Income
$25,000.00$2,083.33Total tax
deductions$43,227.56$3,602.30Total tax
decductions$8,406.55$700.55CPP decductions
$2,544.30$212.03CPP decductions $1,042.39$86.87EI
deductions$995.04$79.59EI deductions$401.38$33.45Total
income tax $46,766.90$3,893.91Total income tax
$9,850.32$820.86Net Income $53,233.10$4,436.09Net Income
$15,149.68$1,262.47Total Net
Income$68,382.78$5,698.57ExpensesPercentage HousingAnnual
Monthly29.29%Mortgage $22,770.84$1,897.570.31%Home
Insurance $240.00$20.006.95%Property
Tax$5,400.00$450.00Housing Maintain 0.93%House
Repairing$720.00$60.000.77%Painting$600.00$50.001.54%App
liance$1,200.00$100.00Utilities2.32%Electricity /water
$1,800.00$150.001.23%Gas$960.00$80.001.54%Internet&TV&
homephone $1,200.00$100.000.93%Cellphone
$720.00$60.00Insurance 1.08%Individually life insurance
$840.00$70.001.33%Coli-Disability Insurance
$1,034.28$86.190.12%Coli-Supplemental Life Inc
$90.00$7.50Groceries and Food 23.15%Groceries
$18,000.00$1,500.001.54%Eat-out$1,200.00$100.000.77%Take-
out$600.00$50.000.46%Daily
drink/coffee$360.00$30.00Transportation1.85%Colin-car
insurance $1,440.00$120.001.70%Jill-Vehicle insurance
$1,320.00$110.001.85%Gas$1,440.00$120.000.31%Maintenanc

11. e $240.00$20.000.15%Parking$120.00$10.003.66%Dodge Ram
Loan$2,844.96$237.084.15%Mazda 3
Loan$3,226.32$268.860.23%Parking$180.00$15.000.31%Vehicl
e licensing$240.00$20.00Child care 0.42%Griffin ,Lacrosse
$324.00$27.000.46%Toy $360.00$30.00Investment
4.63%Colin,RRSP$3,600.00$300.003.09%Jill,
RRSP$2,400.00$200.00Entertainment 0.15%Alcohol
$120.00$10.000.46%Activities
Tickets$360.00$30.000.15%Travel$120.00$10.00Clothing
0.77%Clothes $600.00$50.000.23%Laundry
cleaning$180.00$15.00Medical
0.08%Medicines$60.00$5.00Personl
Care0.39%Hairdresser/barbers$300.00$25.000.22%Other(face
cleaner)$168.00$14.00Gifts 0.46%Gifts
$360.00$30.00100.00%Total Expenses$77,738.40$6,478.20Net
Cash Flows($9,355.62)($779.64)
Sheet1Retirement ExpenseExpensesHousingAnnual
MonthlyPercentage Home Insurance
$240.00$20.000.52%Property
Tax$5,400.00$450.0011.63%Housing Maintain House
Repairing$720.00$60.001.55%Painting$600.00$50.001.29%App
liance$1,200.00$100.002.59%UtilitiesElectricity /water
$1,200.00$100.002.59%Gas$960.00$80.002.07%Internet&TV&
homephone $600.00$50.001.29%Insurance Individually life
insurance $840.00$70.001.81%Coli-Disability Insurance
$1,034.28$86.192.23%Coli-Supplemental Life Inc
$90.00$7.500.19%Groceries and Food Groceries
$18,000.00$1,500.0038.78%Eat-out$600.00$50.001.29%Daily
drink/coffee$720.00$60.001.55%TransportationColin & Jill -car
insurance
$1,200.00$100.002.59%Gas$960.00$80.002.07%Maintenance
$240.00$20.000.52%Parking$120.00$10.000.26%Vehicle
licensing$240.00$20.000.52%Investment
Colin,RRSP$3,600.00$300.007.76%Jill,
RRSP$2,400.00$200.005.17%Entertainment Activities

12. Tickets$600.00$50.001.29%Travel$1,200.00$100.002.59%Cloth
ing Clothes $1,200.00$100.002.59%Laundry
cleaning$180.00$15.000.39%Medical
Medicines$600.00$50.001.29%Personl
CareHairdresser/barbers$300.00$25.000.65%Other(face
cleaner)$168.00$14.000.36%Gifts Gifts
$1,200.00$100.002.59%Total
Expenses$46,412.28$3,867.69100.00%Total after-tax retirement
income=(46412.28-3600-10000)*(1-0.13)=$28546.68
Sheet1Coli & Jill's Balance SheetAssets LiabilitiesCurent
Assets Current LiabilitiesBank Account( Joint)$3,400.00Visa
Card -joint $4,700.00Total current assets$3,400.00Total current
liabilities$4,700.00Household AssetsLong-Term LiabilitiesColi-
2014 Dodge Ram $21,995.00House Mortgage$1,904.43Jill-2015
Mazda 3$20,495.00Mazda Loan$268.86Possessions in the
house$25,000.00Dodge Loan$237.08House $475,000.00Home
Morgage$300,000.00Total household assets$542,490.00Total
long-term liabilities$302,410.37Investment assetsJill Group
RRSP $15,000.00Jill personal RRSP$12,500.00Jill Personal
TFSAs$3,500.00Colin RRSP$31,200.00Colin
TFSAs$7,900.00Total investment assets$70,100.00Total
Assets$615,990.00Total Liabilities$307,110.37Net
Worth$308,879.63Current Ratio:0.72Debt to Asset
Ratio:0.0115Quick Ratio1.468