Mary Spencer's Personal Financial Plan
(8 pages of text)
Mary Spencer was putting the final touches on her personal financial plan before graduating from the Richard Ivey School of Business HBA program in spring 2012. Generally, Mary was happy with her plan. Her goals, investment policy statement, and financial budget all made perfect sense to her. However, she kept returning to one number — a 43 per cent tax rate! It did not seem fair that just when she started to make some serious income, she would have to give 43 per cent of it to the government. During one of her courses, Mary had spent some time learning about tax strategies available to Canadians. They all seemed to involve three- and four-letter acronyms — TSFA, RSP, RHOSP, etc. — but she wondered which ones would have the optimal impact on her tax situation, and if there was a combination that would work best together.
This case is intended for a personal finance course, specifically to address the issues associated with personal tax planning and tax optimization. The case explores the personal tax structures in Canada and how various programs — RSPs, TSFAs, RESPs, etc. — impact personal taxes and savings outcomes.
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