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| Section | Weight | Objectives |
|---|---|---|
| Investment and Tax Planning | 10% | - Investment strategies and portfolio considerations - Tax planning concepts |
| Family Law | 15% | - Legal implications in financial planning - Family property and financial considerations |
| Retirement Planning | 20% | - Retirement income sources and strategies - Government benefits and retirement plans |
| Financial Planning Practice | 10% | - Professional standards and ethical practices - Financial planning process and client relationship management |
| Savings Planning & Debt Management | 10% | - Debt management techniques - Savings strategies and cash flow management |
| Financial Planning for Small Business | 15% | - Small business financial strategies - Business ownership structures and planning |
| Estate Planning | 10% | - Wills, trusts and succession planning - Estate transfer strategies |
| Insurance Planning | 10% | - Risk management and insurance products - Insurance needs analysis |
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NEW QUESTION # 22
Franco is retiring from his job as a high school principal at the end of the year, at age 66. He has $100,000 in his group Registered Retirement Savings Plan (RRSP). His wife will continue to work for another 10 years, and he does not need money from his group RRSP. What would be the best retirement option for Franco?
Answer: A
Explanation:
Franco should transfer the funds to his own RRSP and maintain the tax-deferred accumulation until the statutory RRSP maturity deadline, then convert the account to a RRIF.
Franco is 66. An RRSP must mature no later than the end of the calendar year in which its annuitant reaches age 71. CRA therefore allows approximately another five years of RRSP tax deferral before Franco must withdraw the funds, purchase an eligible annuity, or transfer them to a Registered Retirement Income Fund.
Because he does not currently require income, immediate RRIF withdrawals would unnecessarily accelerate taxable retirement income. However, option B cannot be maintained until his wife retires in 10 years: Franco would then be approximately 76, well beyond the age at which his RRSP must mature.
A direct transfer to a spousal RRSP is not the appropriate mechanism for moving his existing group RRSP retirement assets. Leaving the funds indefinitely in the group arrangement also fails to recognize the age-71 maturity requirement.
Option C precisely matches the available time horizon: preserve RRSP tax deferral for about five years, then establish a RRIF.
FPII reference/topic: Retirement Planning - group RRSPs; RRSP maturity; age 71 conversion requirements; RRIF planning.
NEW QUESTION # 23
Roy gifted his nephew Charles, age 16, shares for his birthday. The managed portfolio will generate both dividends, and capital gains and losses. What will be Roy's future tax implications, with respect to this transfer, until Charles reaches the age of majority?
Answer: C
NEW QUESTION # 24
When a Canadian works abroad for a Canadian employer, what proof must be provided to have that time qualify as residence in Canada for Old Age Security?
Answer: B
Explanation:
Option D directly reflects the Old Age Security residence rules applicable to qualifying employment outside Canada.
Service Canada states that time spent working outside Canada for a Canadian employer may count as Canadian residence where the individual returns to Canada within six months after the employment ends, or where the individual reaches age 65 while still working abroad and otherwise satisfies the applicable conditions. For an application relying on this provision, the individual is required to provide proof of the Canadian employment and proof of physical return to Canada, unless the age-65 exception applies.
The test is therefore not based simply on whether Canadian income tax was paid. Income-tax residency and OAS residence are related concepts in some circumstances but are not interchangeable. Paying Canadian tax alone does not establish the special residence credit for employment abroad.
Option A is incorrect because it states a one-year return period rather than six months and adds income-tax payment as the relevant proof. Options B and C are insufficient because they omit the specific employment and return evidence required.
FPII reference/topic: Retirement Planning - Old Age Security; Canadian residence; employment outside Canada; qualification for public pension benefits.
NEW QUESTION # 25
What is the tax treatment on disability assistance payments for Registered Disability Savings Plans?
Answer: B
NEW QUESTION # 26
Kienle has provided his advisor with the following information:
($)
Income last year
50,000
Pension adjustment last year
2,500
Unused contribution room from previous years
3,500
Assuming he has never over-contributed, what is the maximum amount that Kienle can put into his Registered Retirement Savings Plan without incurring a penalty?
Answer: C
Explanation:
Kienle's available RRSP contribution room is $10,000.
The starting point is 18% of the previous year's earned income:
$50,000 × 18% = $9,000
The pension adjustment reflects retirement benefits accrued through an employer-sponsored pension arrangement and reduces the amount of new RRSP room generated:
$9,000 # $2,500 = $6,500
Kienle also has $3,500 of unused RRSP contribution room carried forward from previous years:
$6,500 + $3,500 = $10,000
Therefore, the maximum contribution shown by the facts is $10,000, corresponding to option C.
CRA's RRSP methodology follows this structure: unused room from the prior year, plus the lesser of 18% of prior-year earned income or the annual RRSP dollar limit, reduced by the applicable pension adjustment and modified where relevant by other pension adjustments or reversals.
Because 18% of $50,000 is only $9,000, the statutory annual dollar ceiling is not the limiting factor in this scenario. The unused $3,500 remains available because unused RRSP deduction room carries forward.
FPII reference/topic: Retirement Planning - RRSP deduction limits; pension adjustments; carry-forward contribution room.
NEW QUESTION # 27
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