National Catholic Forester

Summer 2017 — www.ncsf.com 9 Table A YEARS INCOME NEEDED FACTOR 10 8.8 15 12.4 20 15.4 25 18.1 30 20.4 35 22.4 40 24.1 Table B YEARS BEFORE COLLEGE FACTOR 5 .95 10 .91 15 .86 20 .82 NOTE: Tables A and B help you determine net present value (NPV), the amount of capital required today to satisfy future income or college cost needs, given an assumed investment return of 6%, inflation of 3% for living costs, and 5% for college costs. PREFER AN ONLINE CALCULATOR? Visit the Life Happens website for an online calculator: www.lifehappens.org 6 It will pay for your funeral. No one likes to think about such things, but the truth is if you die, someone will have to pay for your funeral. You wouldn't want to leave your parents, partner or other family members struggling with grief as well as paying for a funeral and burial, which can cost an average of $11,000 4 . If any of this sounds daunting, just know that it doesn't have to be. You can start by doing a quick calculation on your own to see if you need life insurance with this Life Insurance Needs Calculator at right. And just know that you can also talk things through with an insurance agent— at no cost. They will help you figure out how much you may need, and also find a policy that fits into your budget. If you don't have an agent, you can call Cliff our inside sales representative at (800) 344-6273 ext. 236. 1- Social Security benefits, which may be available, have not been factored into this calculation. 2- Trends in College Pricing, 2016, The College Board. Costs reflect total charges, which include tuition, fees, room and board. 3- Distributions from most retirement savings plans are subject to ordinary income tax rates. 4- National Funeral Directors Association. Used with permission from Life Happens. www.lifehappens.org INCOME 1. Total annual income your family would need if you died today. What your family needs, before taxes, to maintain its current standard of living (Typically between 60% - 75% of total income). $ __________ 2. Annual income your family would receive from other sources. For example, spouse's earnings or a fixed pension. 1 (Do not include income earned on your assets, as it is addressed later in the calculation). $ __________ 3. Income to be replaced. Subtract line 2 from line 1. $ __________ 4. Capital needed for income. Multiply line 3 by appropriate factor in Table A. Factor _______. $ __________ ExPENSES 5. Funeral and other final expenses. Typically the greater of $15,000 or 4% of your estate. $ __________ 6. Mortgage and other outstanding debts. Include mortgage balance, credit card balance, car loans, etc. $ __________ 7. Capital needed for college. 2013-2014 average 4-year cost: Private $181,480; Public $80,360 2 . $ __________ Child 1 ______________ x ______________ = _______ Child 2 ______________ x ______________ = _______ $ __________ Child 3 ______________ x ______________ = _______ 8. Total capital required. Add items 4, 5, 6 and 7. $ __________ ASSETS 9. Savings and investments: Bank accounts, money market accounts, CDs, stocks, bonds, mutual funds, annuities, etc. $ __________ 10. Retirement savings: IRAs, 401(k)s, SEP plans, SIMPLE IRA plans, Keoghs, pension and profit sharing plans 3 . $ __________ 11. Present amount of life insurance. Including group insurance as well as insurance purchased on your own. $ __________ 12. Total income producing assets. Add lines 9, 10 and 11. $ __________ 13. Life insurance needed. Subtract line 12 from line 8. $ __________ Estimated 4-Year Cost Appropriate Factor in Table B NPV Life Insurance Needs Worksheet This worksheet can help you get a general sense of how much life insurance you need to protect your loved ones, assuming that you died today. Before buying life insurance, it makes sense to consult with an insurance professional for a more thorough analysis of your needs. +

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