23.3 - RRSP FV n = 30 yrs PMT = \$10,000 i = 6 FV = \$790,581...

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INVESTING RRSP vs NON REGISTERED PROBLEM

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RRSP vs NON-REGISTERED  HE IS 60.  HE WILL SAVE \$10,000 A YEAR.  HE IS  CURRENTLY MAKING OVER \$120,000 A YEAR. HIS  RETIREMENT INCOME WILL BE OVER \$120,000. HE  CAN INVEST THE FUNDS @ 6%.G SHOULD HE INVEST IN AN RRSP OR IN A NON- REGISTERED ACCOUNT? Use a 46% marginal tax rate . APPROACH FV OF SAVINGS IN RRSP FV OF SAVINGS – NON-REGISTERED AFTER TAX VALUE OF RRSP MAKE RECOMMENDATION

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Unformatted text preview: RRSP - FV n = 30 yrs PMT = \$10,000 i = 6% FV = \$790,581 NON RRSP - FV n = 30 yrs PMT = \$10,000 (AFTER TAX OF 46%) = \$5,400 DUE TO TAX DEDUCTIBILITY OF RRSP CONTRIBUTION i = 6% AFTER TAX OF 46% = 3.245% MARGINAL TAX ON INVESTMENT INCOME FV = \$267,132 The RRSP Advantage The RRSP Advantage: \$159,062 or 60% Saved Saved Inside RRSP Outside RRSP After 30 Years \$790,581 \$267132 Less : Tax @ 46% 363,667 \$426,914 \$267,132...
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23.3 - RRSP FV n = 30 yrs PMT = \$10,000 i = 6 FV = \$790,581...

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