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Case One Marsha Had Total Income of $112,000 and Earned Income of Income

Question 3

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Case One
Marsha had total income of $112,000 and earned income of $75,000 in 2015. He 2015 Notice of Assessment showed unused RRSP contribution room of $12,000.
Her pension adjustment from 2015 was $5,000. She anticipates a pension adjustment of $7,000 in 2016.
Required:
Calculate the maximum RRSP deduction that Marsha can make for the 2016 taxation year.
Case Two (Independent of Case One)
Marsha is 35 years old. She has the option of investing $2,000 per year in a
savings account at 8%, or $2,000 in an RRSP at 8%. The money will be invested for the next 30 years, and will not be withdrawn until Marsha retires.
Required:
Calculate the valuation of each option, net of taxes, if Marsha withdraws all of the money when she turns 65? Assume that her tax rate will be 35% every year until she retires.

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