Question

In this course we have examined the importance of setting financial goals and strategies to achieve these goals. For this assignment students will research the practical aspects of financial planning. Assume you have graduated from UOIT and now work in your desired field. You are now 40 years old, have paid off your student loans, you have a life partner and 1 child. You just purchased your first home and are now ready to start saving for retirement which you are planning to start at age 65.

Required:

1. Due external research of how to open a discount brokerage account. Firms like Questrade are also considered to be a discount brokerage firm. Examine their fees, commission amounts, research capabilities, etc. Compare three discount brokers and justify your choice of the one you choose.
2. Which types of accounts will you be opening and why? What are the fees involved with each type of account?
3. There are three main risk tolerance levels; Low – people looking for safety and investment income, Medium – people looking for some safety but are willing to have more risk to achieve some investment growth, and High – people looking for investment growth and are wiling to experience large volatility in their returns.

For each type of investor recommend an asset mix and expected annual percentage returns each should expect from an investment programme. For each type of investor, also recommend which type of investment accounts are more suitable for each type of investment.

(Hint: There is lots of information on mutual funds and ETF’s on sites such as Globefund, FundData, Vanguard Canada, Blackrock Canada, BMO Funds etc. Student’s can to use the ten-year annual return history or return from inception as a proxy for the fund’s asset class future projected returns.)

4. Assume you have no pension plan through your employer and you wish to have a family retirement income of $85,000 before tax (in today’s money) starting at age 65, how much do you need to save each year starting at age 40 to achieve this goal for each type of risk tolerance type and return you calculated in part 3? Assume you will receive average pension benefits from the government programmes. Also, assume inflation will average 1.5% over the period.

Answer 1

Assumptions :-

1. I am 40 years old

2. Have life partner and 1 child

3. I am done with purchase of 1st home

Planning

1. First i will decide how much of amount required to my monthly expenses

2. How ich amount is required to the education of my child

3. What are the interest rates offeren by different banka with different type of accounts

4. I will open two types of accounts a. Savings account

b. Fixed deposit account by studying all banks offers and policies.

5. I will put my monthly expenses amount and cost of education to my child in savings account

6. Why I am putting those in savings account means flexible to withdraw at any time of necessity

7. Rest of my earnings to fixed account

8. If possible I will pay insurance to all my family members to avoid unexpected health issues

This is my plan to get ready to face my retirement at 65 in the financial aspect.

I hope, all the above given information is useful to you.

Thank you.