Income Needs
- Annual income your family will need if you die today
A good rule of thumb is 60-80% of total income - including salaries, interest, dividends and any other sources of income
- Annual income from sources other than your salary or earnings
Examples are spouse's earnings, interest, dividends, social security and survivor-ship income benefits.
- Annual Income to be replaced.
(Subtract line 2 from line 1.)
- How many years will you need to replace income and what estimated lump sum amount of money could be enough to do it?
(Multiply Line 3 by the number of years)
If you choose to estimate how much your money will be earning while your family draws an income from it, you can use the table below (as a guide) to estimate how much you would need if you could make a 6% rate of return. Inflation is assumed to be 3%. If 6% is too aggressive, choose a higher factor than the one in the table. (not to exceed the number of years) Keep in mind that future performance of investments (fixed or variable) are not guaranteed. Also keep in mind that inflation will reduce the buying power of a fixed annual income amount.
| 10 years: x 8.9 | 15 years: x 12.4 | 20 years: x 15.4 | 25 years: x 18.1 | 30 years: x 20.4 | 35 years: x 22.4 | 40 years: x 24.1 |
Expenses
- Burial and Final Expenses / Emergency Fund
(The average cost of an adult funeral is $10,000)
- Mortgage, Car Loans, Credit Cards, and other debt:
- College Costs*
2011-2012 average annual cost of tuition, fees, room & board of a four year college:
- Private Non-Profit Four Year: $38,589
- Public Four Year: $17,131
*Source: College Board Advocacy and Policy Center - Trends in College Pricing 2011
Child
| Annual Amount
$____________
$____________
$____________
$____________ | Multiplied by number of years in College
| Amount Needed
$____________
$____________
$____________
$____________
| Total Funding Needed
$____________ |
- Total Capital Required:
(Add lines 4, 5, 6 and 7.)
Assets
- Savings and Investments
(Bank accounts, C.D.s, stocks, bonds, mutual funds, real estate, rental property, etc.)
- Retirement Savings
(401(k) plans, IRAs, pension, profit sharing plans, SEPs, etc.)
- Present amount of life insurance in force
Personal and group life insurance)
- Total Assets
(Add lines 9, 10, and 11)
- Estimated amount of Life Insurance needed
(Subtract line 12 from line 8.)
|
$_________________
$_________________
$_________________
$_________________
$_________________
$_________________
$_________________
$_________________
$_________________
$_________________
$_________________
$_________________
$_________________ |
