Exploring financially driven financial planning in Canada with emphasis at account and government benefit level - ON-157

Preferred Disciplines: Finance, Mathematics, Computer Science (Masters or PhD)
Company: Anonymous
Project Length: 8 months (2 units)
Desired start date: As soon as possible
Location: Toronto, ON
No. of Positions: 3
Preferences: Southern Ontario Universities, emphasis on University of Toronto, University of Waterloo, York University and McMaster University

About the Company: 

Privately held consulting firm interested in helping Canadians plan and save more effectively and efficiently. 

Project Description:

How should a Canadian save for various goals and how should a Canadian draw down those savings in retirement? What variables impact the myriad of options faced by Canadians throughout their career and into retirement? What role does debt (such as mortgages) play in such a financial construct? Can / should life insurance and annuities play a role in a Canadian’s financial plans?

The incumbent(s) would be expected to model CPP, OAS, GIS, PRB and other government benefits available as well as the savings vehicles available such as TFSA, RRSP, RESP and non-registered savings to determine how close a model Canadian is to reaching his or her financial goals.  In addition, optimization of various aspects of the process should be utilized based on deterministic assumptions.

Research Objectives:

  • Use math / finance / computer science expertise to model optimal savings strategies
  • What variables impact the optimal use of RRSP versus TFSA?
  • What variables impact the use of a RESP as a savings vehicle for a child’s education?  How should contributions be spread to generate the highest benefit?
  • What variables impact the decision to draw on CPP early (age 60) or late (age 70)?
  • How does individual longevity impact the decision to utilize annuities? 
  • How does inflation impact long-term savings decisions?
  • Many of the above objectives are correlated so that a holistic approach is ideal 

Methodology:

  • The incumbent(s) would be required to code the definitions for government benefits and savings vehicles, non-government savings vehicles, life insurance and annuities, and finally debt (both tax deductible and non-tax deductible)
  • Where appropriate, define criteria and code the optimization of various financial decision-making processes, such as whether it is preferable to accumulate savings in a TFSA versus a RRSP
  • Utilize diverse individual assumptions which include (but likely not limited to) age, salary, savings to date, required spending and retirement income needs
  • Gauge sensitivity of various decision-making processes to the underlying assumptions
  • Visualize the various outcomes in order to communicate research to Canadians who may not be as fluent in financial savings vehicles options and necessary decisions that are being made on a continual basis
  • At each stage of research, the incumbent(s) will be working with the sponsor who will provide guidance on:
    • Tax and financial rules associated with the various products
    • Variables to utilize for defining value of each financial product and decision-making process
    • Algorithms for determining savings viability and longevity
    • Optimization features and what financial decisions could be optimized
    • Visualization of research output
    • Code speed, complexity and accuracy and natural tradeoffs that may be required

Expertise and Skills Needed:

    • Masters / PhD candidates in math and finance with knowledge of Canadian taxation, savings mechanisms
    • Intermediate to advanced knowledge of Python and optimization techniques in Python

    For more info or to apply to this applied research position, please

    1. Check your eligibility and find more information about open projects
    2. Interested students need to get the approval from their supervisor and send their CV along with a link to their supervisor’s university webpage by applying through the webform.
    Program: