Mini-Case D: (2 marks)
Twins, Alex and Taylor recently celebrated their nineteenth birthday on October 20, 2024. On October 28th, they received an inheritance of $30,000 each from a relative's estate. They wish to invest this money wisely.
Alex is considering opening a Tax-Free Savings Account (TFSA) and wants to know the maximum contribution he can make. Any remaining funds from his inheritance will be directed towards a Registered Retirement Savings Plan (RRSP). Alex worked part-time in 2023, earning $22,000 and in 2024, he earned $23,200. He has not yet contributed to either a TFSA or an RRSP. Any additional funds from the $30,000 will go to his Savings account.
Taylor, on the other hand, has already deposited $1,000 of her birthday money into a newly opened TFSA and is curious about how much more she can contribute now that she has inherited the money. Any remaining funds will go into her RRSP. Taylor has never worked but was asked to work at Sephora over the upcoming holidays from December 15th to 31st where she expects to earn $1,800. Like Alex, she has not made any prior contributions to an RRSP. Any additional funds from the $30,000 will go to her Savings account.
As their finance friend, what are the maximum contributions that Alex and Taylor can make to their respective TFSA, RRSP and Savings accounts as of December 31, 2024, based on their wishes? (2 marks)
Calculate and allocate the maximum TFSA, RRSP and Savings account contributions: (2 marks)
Alex:
TFSA $
RRSP $
Savings Account $
Total $30,000
Taylor:
TFSA $
RRSP $
Savings Account $
Total $30,000