Final answer:
The question pertains to Lalita's withdrawal from her RRSP under the Home Buyers' Plan and the subsequent repayment requirements. The HBP allows a maximum withdrawal of $35,000, which must be repaid within 15 years, starting two years after the withdrawal. The contextual examples and Rosalie's retirement planning highlight the concepts of property investment and the effect of inflation on future finances.
Step-by-step explanation:
The question concerns Lalita making a Home Buyers' Plan (HBP) withdrawal from her registered retirement savings plan (RRSP). To address the scenario presented, it is important to understand how the HBP works. The HBP is a Canadian program that allows individuals to withdraw funds from their RRSPs to buy or build a qualifying home for themselves or for a related person with a disability. The maximum withdrawal limit is $35,000 per individual as of 2020.
One of the key terms of the HBP is that the amount withdrawn must be repaid into the RRSP within a 15-year period, starting the second year following the year in which the withdrawal was made. Therefore, for Lalita, who made an HBP withdrawal of $25,000 on January 31, Year 1, she would need to begin repaying the amount by the end of Year 3, and the repayments must be completed by the end of Year 17.
In the examples provided for context, Freda and Ben have bought houses, and the values of their homes have increased. This information connects to the idea of property value appreciation, which can impact the decision to use the HBP, as owning a home can be an investment strategy. Rosalie's situation involves planning for retirement and taking inflation into account, which underscores the importance of long-term financial planning and understanding how inflation can diminish the future value of money.