Question

Steve and Rebecca have 2 small children ages 3 and 4. They have moved to the suburbs and bought a house to provide enough space for their kids to run around and burn energy so that they have time to binge watch their TV shows. They have a sizable mortgage of $720,000 on the home. They earn a combined take home salary of $225,000. They want their kids to pursue post-secondary education but don’t expect either of the children will get a scholarship, so they need to save up $100,000. Their best friend is a financial planner and helped them finance a new SUV. The monthly loan payments are $125. Even with their large salary they are worried about their ability to repay the car loan, save for their kids’ education and have the mortgage paid off by retirement, which is 27 years away. It seems like a long time, but monthly income just seems to disappear, and their debts don’t! They have the following investment portfolios:

Joint bank account

9,200

Steve Non-registered account

150 shares of BCE

9450

Rebecca TFSA

High interest Savings

1200

Non-redeemable GIC 25SEP2022 maturity – 1.75%

3000

Total TFSA = 4,200

Steve RRSP

Canadian Balanced ETF

15150

US Equity ETF

28650

Canadian Income Fund

50000

Total RRSP = 93,800

Rebecca RRSP

Cash

500

Cashable GIC maturing 25DEC2020

5000

High Yield Fixed Income

15000

Global balanced

12580

Canadian short-term fixed income

22569

Canadian fixed income

15789

Total RRSP = 71,438

Family RESP Account

Cash

200

What is their investment goal?

What is type of investment account do we recommend?

Asset allocation of the portfolio and why this is appropriate

Other aspects you need to consider that are not specifically noted

Answer 1

Answer 1: Goal of Steve and Rebecca

1. Paid of Mortgage of $720000 till Retirement which 27 Years Away.

2.Save $100000 for Children Education.

3.Repay Car of SUV- $125 Monthly

Answer 2: Type of Investment Account

If we see their Goals it is Consist of various Account it should  based on which this are the type of account he should consider.

1.Retirement Account(RRSP)

2 Joint Bank Account- For liquidity Cash for Daily Requirement

3.TFSA4.

4. RESP Account

Answer 3 Aset Allocation

Combined Salary-225000

Steve Non-registered account 150 shares of BCE-9450

1.Retirement Account(RRSP)

Presently: 93800+71438=165238

Future Plan- $20546 Yearly should go into RRSP Account =554762

=720000 Debt is clear

2 Joint Bank Account- For liquidity Cash for Daily Requirement

3.TFSA

Presently :4200

4.RESP Account

Presently:9200

Future Plan:10000 Yearly from Salary Goes to RESP Account

- It will Help to Complete Goal Related to Education Goal.

NEW SUV-$125/Monthly should pay monthly