This is a sample household, not real people. The answers below are the ones entered into the Protection Map questions, and every result is what the Protection Map produced from them — the same results a customer sees on a tablet or computer. Use it to learn how each answer feeds the results, how each figure is worked out, and what the ways to close each gap look like. All figures are in today's dollars unless a line says otherwise.
These are gaps to understand, not a verdict. Each one is set against the goal the household chose, and each has more than one way to close it.
The emergency fund is short of the goal
Gap, in today’s dollars
Disability coverage falls short of the goal
Gap, in today’s dollars
Not enough life insurance for what the family would need
Gap, in today’s dollars
There is no coverage for care later in life
Gap, in today’s dollars
This is one example of what closing every gap would take for this household, using coverage and cash only — spending stays the same. It is not a recommendation: other combinations could close the same gaps, and the right choice depends on the household.
| Who | What changes | Amount | Gap it closes |
|---|---|---|---|
| Household | Cash savings raised from $20,000 to $60,000 | +$40,000 | Income Interruption (and pays the bills while waiting for disability benefits to start) |
| Joe | Personally owned disability coverage: $1,000 a month, tax-free, starting after 90 days, paying to age 65 | $1,000 a month | Ability to Earn |
| Joe | A new 30-year term life policy | $1,350,000 | Loss of Life |
| Joe | A new permanent life policy with $500,000 of long-term care benefits built in | $500,000 | Loss of Life and Extended Care |
| Jill | Personally owned disability coverage: $4,375 a month, tax-free, starting after 90 days, paying to age 65 | $4,375 a month | Ability to Earn, in part |
| Jill | Life insurance through work raised from $50,000 to $250,000 | +$200,000 | Loss of Life |
| Jill | A new 30-year term life policy | $1,250,000 | Loss of Life |
| Jill | A new permanent life policy with $500,000 of long-term care benefits built in | $500,000 | Loss of Life and Extended Care |
| Financial risk | Person | Before | After |
|---|---|---|---|
| Income Interruption | Household | $40,000 | $0 — no gap |
| Ability to Earn | Joe | $351,250 | $0 — no gap — Cash and investments cover the months before benefits begin. No monthly gap once benefits begin. |
| Ability to Earn | Jill | $1,528,000 | $184,125 |
| Extended Care | Joe | $225,000 | $0 today — Covered today; a gap can open later (see Extended Care). |
| Extended Care | Jill | $225,000 | $0 today — Covered today; a gap can open later (see Extended Care). |
| Loss of Life | Joe | $1,841,204 | $0 — no gap |
| Loss of Life | Jill | $1,964,841 | $0 — no gap |
These figures include future price rises. We assume costs go up 3% a year and savings keep up with prices, with nothing added. Each debt is paid down by its own payments until the loan ends. Paid household help stops when it's no longer needed. Life insurance through work stops counting at 65.
Joe
| If it happened… | The gap then |
|---|---|
| Today | $0 — no gap |
| In 5 years | $0 — no gap |
| In 10 years | $0 — no gap |
| In 25 years (when Joe would be 60) | $0 — no gap |
Jill
| If it happened… | The gap then |
|---|---|
| Today | $0 — no gap |
| In 5 years | $0 — no gap |
| In 10 years | $0 — no gap |
| In 25 years (when Joe and Jill would be 60) | $0 — no gap |
Each row includes price rises up to that year. Care costs rise 4% a year — faster than prices in general (3%) — so care costs more the later it is needed.
Joe
| When | Care would cost | Benefit pays | Left to fund |
|---|---|---|---|
| Today | $225,000 | $500,000 | Covered |
| In 5 years (Joe would be 40) | $273,747 | $500,000 | Covered |
| At age 65 (in 30 years) | $729,764 | $500,000 | $229,764 |
| At age 80 (in 45 years) | $1,314,265 | $500,000 | $814,265 |
Jill
| When | Care would cost | Benefit pays | Left to fund |
|---|---|---|---|
| Today | $225,000 | $500,000 | Covered |
| In 5 years (Jill would be 40) | $273,747 | $500,000 | Covered |
| At age 65 (in 30 years) | $729,764 | $500,000 | $229,764 |
| At age 80 (in 45 years) | $1,314,265 | $500,000 | $814,265 |
Each question as the customer saw it, the answer given, and what it means. “The app's note” is the hint shown under the question.
What is your first name?
Joe
We use the name so each person's results are clearly labeled.
What year were you born?
1991
Age sets how many working years Ability to Earn measures (to the age chosen in the goals), how many years until the care age used in Extended Care, and the ages shown in “If it happened later”.
What state do you live in?
IA
Where the household lives. In this version it sets the public-college cost used for the children's education in Loss of Life. Extended Care uses FRP's national planning estimate for the cost of care, not a state figure.
Do you have a spouse or partner?
Yes
We look at each adult separately, because the same event affects the household differently depending on whose income or care is involved. That is why Ability to Earn, Extended Care and Loss of Life each show one result per adult.
What is your spouse or partner's first name?
Jill
We use the name so each person's results are clearly labeled.
What year was Jill born?
1991
Age sets how many working years Ability to Earn measures (to the age chosen in the goals), how many years until the care age used in Extended Care, and the ages shown in “If it happened later”.
How many children or other dependents do you support?
2
The children the household supports. Their number and ages drive how many years of support the Loss of Life goal covers and the college amount.
What is child 1's first name? (optional)
(not answered)
What year was child 1 born?
2022
The youngest child's age sets how long the household would need support under the Loss of Life goal (until the youngest is grown). Each child's age also sets when college would begin.
What is child 2's first name? (optional)
(not answered)
What year was child 2 born?
2024
The youngest child's age sets how long the household would need support under the Loss of Life goal (until the youngest is grown). Each child's age also sets when college would begin.
About what is your combined federal and state income tax rate?
25%
Used for two things: working out what a taxed disability benefit would actually pay each month, and estimating pay before tax from take-home pay (because work disability coverage is described as a percentage of pay).
Is Joe working?
Working for an employer
Whether this adult earns a pay check that a disability or a death would interrupt.
What is Joe's take-home pay each month?
$7,500
Take-home pay is the income that actually pays the household's bills. If this adult could not work, it is the income that would stop; if the other adult could not work, it is the income that keeps coming in. In Loss of Life it is the income the household would lose.
The app's note: After taxes and anything taken out of your paycheck.
How much goes into retirement for Joe each month, including any employer match?
$1,000
Retirement saving usually stops when pay stops. When the Ability to Earn goal keeps retirement saving going (the middle choice), this amount is added to essential spending to set that goal.
The app's note: Enter 0 if nothing.
Does Joe provide childcare or household help you'd have to pay someone for if Joe couldn't do it?
No
Unpaid work at home — childcare, caregiving, running the household — that the household might have to pay someone else to do.
Does Joe own life insurance personally — not through work?
No
Does Joe have life insurance through work?
Yes
Whether there is life insurance through work.
About how much would Joe's life insurance through work pay?
$100,000
Counted against the Loss of Life amount. The results note that life insurance through work usually ends when the job ends.
The app's note: Often shown as a multiple of salary — your benefits summary or HR team can tell you the dollar amount.
Does Joe have long-term disability coverage through work?
Yes
Whether there is long-term disability coverage through work — one of the inputs behind the Ability to Earn result.
How would you like to describe Joe's disability coverage at work?
A percentage of pay with a monthly maximum
How the coverage is described on the benefits summary — usually a percentage of pay with a monthly maximum.
The app's note: For example, “60% of pay up to $5,000 a month.”
What percentage of pay does it replace?
60%
The share of pay the coverage replaces. Pay here is pay before tax, estimated from take-home pay and the household's tax rate.
The app's note: The 60 in “60% of pay up to $5,000 a month.” Enter 60 for 60%.
What is the most it pays each month?
$5,000
The most the coverage pays in a month, whatever the percentage works out to. When the percentage would pay more than this, the maximum is what the household receives.
The app's note: The $5,000 in “60% of pay up to $5,000 a month.”
How many days before it starts paying?
90 days
How long before benefits begin. No benefit is paid during this time, so the household lives on its savings.
The app's note: Often 90 or 180 days.
Would the benefit be taxed?
Yes — it would be taxed
Whether the benefit would be taxed. A taxed benefit is shown after the household's tax rate, because what arrives each month is what pays the bills.
How long would it keep paying?
To age 65
How long the coverage keeps paying. Ability to Earn is measured to the age chosen in the goals; benefits that stopped earlier would leave the later years uncovered.
Does Joe own a disability policy personally — not through work?
No
Disability coverage this adult owns personally, which is not tied to a job.
Does Joe have separate long-term care coverage, not part of a life insurance policy?
No
Whether any long-term care coverage is in place. With none recorded, the whole Extended Care goal is shown as not yet funded.
Is Jill working?
Working for an employer
Whether this adult earns a pay check that a disability or a death would interrupt.
What is Jill's take-home pay each month?
$6,250
Take-home pay is the income that actually pays the household's bills. If this adult could not work, it is the income that would stop; if the other adult could not work, it is the income that keeps coming in. In Loss of Life it is the income the household would lose.
The app's note: After taxes and anything taken out of your paycheck.
How much goes into retirement for Jill each month, including any employer match?
$800
Retirement saving usually stops when pay stops. When the Ability to Earn goal keeps retirement saving going (the middle choice), this amount is added to essential spending to set that goal.
The app's note: Enter 0 if nothing.
Does Jill provide childcare or household help you'd have to pay someone for if Jill couldn't do it?
Yes
Unpaid work at home — childcare, caregiving, running the household — that the household might have to pay someone else to do.
About how much a month would it cost to replace that help?
I'm not sure
What it would cost each month to pay for that support. When the answer is “I'm not sure”, the assessment uses $3,000 a month as an estimate, says so on the results, and lists the figure as worth confirming. It counts in Loss of Life and in Ability to Earn.
How long would you need that paid help?
A number of years
How long that help would be needed — until the youngest child is 18 or 24, or a number of years.
About how many years would you expect to need paid help to replace the support Jill provides?
10 years
How long paid help would be needed to replace that support. When the answer is “I'm not sure”, the assessment uses 5 years as an estimate and says so on the results.
The app's note: Your best estimate is fine.
Does Jill own life insurance personally — not through work?
No
Does Jill have life insurance through work?
Yes
Whether there is life insurance through work.
About how much would Jill's life insurance through work pay?
$50,000
Counted against the Loss of Life amount. The results note that life insurance through work usually ends when the job ends.
The app's note: Often shown as a multiple of salary — your benefits summary or HR team can tell you the dollar amount.
Does Jill have long-term disability coverage through work?
No
Whether there is long-term disability coverage through work — one of the inputs behind the Ability to Earn result.
Does Jill own a disability policy personally — not through work?
No
Disability coverage this adult owns personally, which is not tied to a job.
Does Jill have separate long-term care coverage, not part of a life insurance policy?
No
Whether any long-term care coverage is in place. With none recorded, the whole Extended Care goal is shown as not yet funded.
How much do you spend each month on bills you can't stop paying?
$10,000
Essential spending — the necessary bills the household can't stop paying. It sets the Income Interruption goal (months of essentials in savings) and is the base of the Ability to Earn goal.
The app's note: Housing, utilities, food, transport, required debt payments, insurance, childcare.
Any other regular income besides pay — a pension, Social Security, alimony or child support?
(not answered)
The app's note: Leave out rent from a property. That's asked below.
About how much do you have in cash and savings?
$20,000
Money the household could reach today. It is the first resource used when income stops, it pays the bills during the waiting period before disability benefits begin, and in Loss of Life it counts toward the emergency fund.
About how much do you have invested outside of your retirement accounts?
$0
Investments outside retirement accounts. A second layer of reachable money.
Do you have a mortgage?
Yes
Whether the household has a mortgage.
About how much is still owed on it?
$500,000
What is still owed. In Loss of Life it is the amount needed to pay off the mortgage, if the household chooses to.
What is your monthly mortgage payment, principal and interest only?
$3,160
Principal and interest only. Once the mortgage is paid off, the household no longer needs income to cover this payment.
The app's note: Leave out property taxes and home insurance.
About how many years are left?
30 years
How long the mortgage payment would have lasted. If the mortgage is paid off, its payment ends — counted only for these years.
If one of you died, should life insurance pay off the mortgage?
Yes
A choice, not a fact: pay the mortgage off if one adult died, or keep making the payments. The results show both.
Do you have any other loans or credit card balances?
Yes
Whether there is debt other than the mortgage.
How would you like to enter them?
One total for all of them (simpler)
About how much is owed in total?
$75,000
Paid off in Loss of Life, along with the mortgage.
About how much do you pay each month in total?
$1,500
Monthly payments on those debts. Once those debts are paid off, the household no longer needs income to cover these payments.
About how many years until they're paid off?
I'm not sure
How long those payments would have lasted. When the answer is “I'm not sure”, it is estimated as the balance divided by the payment (marked *) — ignoring interest, which is the cautious choice.
Do any of your children have special needs that may require care as an adult?
(not answered)
Do you plan to help pay for college for your child born in 2022?
(not answered)
Do you plan to help pay for college for your child born in 2024?
(not answered)
About how much is saved for college?
$0
Money already set aside for college. It reduces the college amount in Loss of Life.
The app's note: Enter 0 if none.
Do you own a rental or investment property?
No
Whether the household owns a rental or investment property.
If your income stopped, how many months of essential spending would you want in savings?
6 months (FRP's starting point)
The emergency-fund goal: how many months of essential spending to set aside. Income Interruption compares it with the cash, savings and investments outside retirement on hand.
If one of you couldn't work for a long time, what should your income keep covering?
Essential spending and retirement saving (FRP's starting point)
What the household's income should keep covering if one adult could not work. The middle choice keeps retirement saving going as well as essential spending.
If one of you died, what should the household's money do?
Support the household until the youngest child is grown (FRP's starting point)
What the household's resources should do if one adult died.
At what age do you consider a child grown?
24 (FRP's starting point)
The age at which the youngest child is considered grown — the end of the support period in Loss of Life.
If one of you couldn't work, until what age should we count the lost pay?
65 (FRP's starting point)
How far ahead Ability to Earn measures the income that would stop.
If one of you died, should the money also refill your emergency fund?
Yes
Whether the Loss of Life amount brings savings up to the emergency-fund goal.
If one of you died, how much of the lost take-home pay could you live on by cutting back?
80% (FRP's starting point)
Used only for “Reduce the risk” in Loss of Life: how much lower the amount would be if the household could live on less.
If you saved up to close a gap yourself, how many months would you give yourself?
24 months (FRP's starting point)
The period used when the results show saving toward a gap month by month.
If one of you needed long-term care later in life, what should we plan for?
3 years in assisted living (FRP's starting point)
The care to plan for: how long, and where. It sets the Extended Care goal.
Want to see care costs at another age?
No — today, in 5 years, at 65 and at 80 is enough
We show each risk today, in 5 years and in 10 years. Want to see another age too? (Joe's age)
60
Adds a row to each “If it happened later” table showing the result as if the event happened at this age.
For each financial risk: what it measures, the goal the household chose, where it is today, the gap, the working, and the ways to close it.
A layoff, an illness or a gap between jobs can stop a paycheck with little warning, and the bills keep coming. The money you've set aside buys your household time.
How long the household's cash, savings and investments outside retirement could pay for essential spending if income stopped.
An emergency fund also gets the household through a large medical bill. Every health plan has an out-of-pocket maximum: the most you would pay for covered care in a plan year. Keeping more than that in savings means a serious illness or injury doesn't have to become debt on top of lost income.
How families protect against this. An emergency fund protects your household's bills while income is paused. It buys time to find the right next job rather than the first one.
How many months of essential spending would you want set aside?
We spread the saving to close the gap over 24 months.
Your goal: 6 months of essential spending set aside — $60,000 in today's dollars.
Where you are: $20,000 in cash and savings, enough for about 2 months — in today's dollars.
| $20,000 cash and savings ÷ $10,000 a month of essential spending | 2 months |
| 6 months × $10,000 a month | $60,000 goal |
| $60,000 goal − $20,000 you have | $40,000 gap |
All figures in today's dollars.
Coverage through work usually ends when the job does. If the income stopped because a job ended, Joe's life insurance and disability coverage through work and Jill's life insurance through work would usually end with it.
$40,000 short of your 6-month goal, in today's dollars.
Figures in today's dollars.
| If it happened… | The gap then |
|---|---|
| Today | $40,000 |
| In 5 years | $35,938 |
| In 10 years | $41,661 |
| In 25 years (when Joe would be 60) | $64,907 |
These figures include future price rises. We assume costs go up 3% a year and savings keep up with prices, with nothing added. Each debt is paid down by its own payments until the loan ends. Paid household help stops when it's no longer needed. Life insurance through work stops counting at 65.
Your ability to earn is likely the largest financial resource your household has. An illness or injury can take it away for years, not months.
What would happen to the household's income if one of you could not work, from the first month to age 65.
How families protect against this. Disability insurance protects your paychecks over the rest of your working life. Few households could save enough to replace years of income. Disability insurance pays part of your income if illness or injury keeps you from working.
If one of you could not work for a long time, what should the household's income keep covering?
We count the lost income up to age 65.
We spread the saving to build a reserve over 24 months.
Your goal: keep essential spending and retirement saving going — $11,000 a month.
If Joe could not work: $6,250 a month of income keeps coming in, plus $3,750 a month of disability benefits after tax once they begin.
| $11,000 a month goal − $6,250 a month income that keeps coming in − $3,750 a month disability benefits after tax | $1,000 a month short |
| The goal: $10,000 a month of essential spending + $1,000 a month of Joe's retirement saving | $11,000 a month |
| Joe's disability benefit (coverage through work), after a 3-month wait | Taxed at your 25% rate: $5,000 a month before tax, $3,750 a month after |
| How Joe's benefit through work is worked out | 60% of about $10,000 a month of pay would be $6,000, capped at the $5,000 maximum — so $5,000 a month before tax, $3,750 after. |
| Joe's pay | We estimated Joe's pay before tax at about $10,000 a month, from $7,500 a month of take-home pay and your 25% tax rate. |
| Before the benefit starts: $4,750 a month short for the first 3 months ($4,750 a month × 3) | $14,250 |
| Covered by your $20,000 of cash and investments | $5,750 left |
All figures in today's dollars.
How the gap adds up from the first month, and how much cash and investments would be left (in today's dollars).
| If it lasted | Gap so far | Savings left |
|---|---|---|
| 1 year | $23,250 | $0 |
| 3 years | $47,250 | $0 |
| 5 years | $71,250 | $0 |
| 10 years | $131,250 | $0 |
| to age 65 | $371,250 | $0 |
By age 65 you'd be $371,250 short of your goal. Your $20,000 of cash and investments would cover part of that, leaving a gap of $351,250 (in today's dollars).
Waiting period: $14,250 short over the first 3 months before benefits begin. Your $20,000 of cash and investments covers it, leaving $5,750.
After benefits begin: $1,000 a month short of your goal.
Your cash and investments would run out in month 9.
Joe's take-home of $7,500 a month would drop to $3,750 a month of benefits — $3,750 a month less.
The household could still pay for essential spending once benefits begin.
Figures in today's dollars.
| If it happened… | The gap then |
|---|---|
| Today | $351,250 |
| In 5 years | $0 — no gap |
| In 10 years | $132,626 |
| In 25 years (when Joe would be 60) | $152,661 |
These figures include future price rises. We assume costs go up 3% a year and savings keep up with prices, with nothing added. Each debt is paid down by its own payments until the loan ends. Paid household help stops when it's no longer needed. Life insurance through work stops counting at 65.
Your goal: keep essential spending and retirement saving going — $10,800 a month.
If Jill could not work: $7,500 a month of income keeps coming in and there are no disability benefits.
| $10,800 a month goal + $3,000 a month household help − $7,500 a month income that keeps coming in | $6,300 a month short |
| The goal: $10,000 a month of essential spending + $800 a month of Jill's retirement saving | $10,800 a month |
All figures in today's dollars.
How the gap adds up from the first month, and how much cash and investments would be left (in today's dollars).
| If it lasted | Gap so far | Savings left |
|---|---|---|
| 1 year | $75,600 | $0 |
| 3 years | $226,800 | $0 |
| 5 years | $378,000 | $0 |
| 10 years | $756,000 | $0 |
| to age 65 | $1,548,000 | $0 |
By age 65 you'd be $1,548,000 short of your goal. Your $20,000 of cash and investments would cover part of that, leaving a gap of $1,528,000 (in today's dollars).
You'd be $6,300 a month short of your goal.
That is while the household help is needed (about 10 years). After that: $3,300 a month short.
Your cash and investments would run out in month 4.
Jill's take-home of $6,250 a month would stop, and no benefits would replace it.
The household would be $5,500 a month short of even essential spending.
Figures in today's dollars.
| If it happened… | The gap then |
|---|---|
| Today | $1,528,000 |
| In 5 years | $811,492 |
| In 10 years | $553,694 |
| In 25 years (when Joe and Jill would be 60) | $184,252 |
These figures include future price rises. We assume costs go up 3% a year and savings keep up with prices, with nothing added. Each debt is paid down by its own payments until the loan ends. Paid household help stops when it's no longer needed. Life insurance through work stops counting at 65.
Many people will need help with daily living later in life. How it's paid for decides who chooses your care — and whether it drains what was meant for the people you care about.
What care later in life could cost, and how much of it is not yet funded.
How families protect against this. Long-term care insurance protects your savings and your choices if you need care later in life, and the family who would otherwise pay for it or provide it. Care can last years and cost more than most savings, and coverage pays toward it so it doesn't use up what was meant for others.
If one of you needed long-term care later in life, what should we plan for?
Your goal: plan for 3 years in assisted living — $225,000 in today's dollars.
Where you are: Joe has no long-term care coverage.
| 3 years × $75,000 a year | $225,000 in today's dollars |
| The same care at age 80 (costs rising 4% a year for 45 years) | $1,314,265 in that year's dollars |
These care costs are our own planning estimate, not a published average.
$225,000 isn't paid for yet, in today's dollars. With care costs rising, that would be about $1,314,265 at age 80.
Figures in today's dollars.
| If it happened… | The gap then |
|---|---|
| Today | $225,000 |
| In 5 years (Joe would be 40) | $273,747 |
| At age 65 (in 30 years) | $729,764 |
| At age 80 (in 45 years) | $1,314,265 |
These figures include future price rises. We assume costs go up 3% a year and savings keep up with prices, with nothing added. Each debt is paid down by its own payments until the loan ends. Paid household help stops when it's no longer needed. Life insurance through work stops counting at 65.
Care costs rise 4% a year — faster than prices in general (3%) — so care costs more the later it is needed.
Your goal: plan for 3 years in assisted living — $225,000 in today's dollars.
Where you are: Jill has no long-term care coverage.
| 3 years × $75,000 a year | $225,000 in today's dollars |
| The same care at age 80 (costs rising 4% a year for 45 years) | $1,314,265 in that year's dollars |
These care costs are our own planning estimate, not a published average.
$225,000 isn't paid for yet, in today's dollars. With care costs rising, that would be about $1,314,265 at age 80.
Figures in today's dollars.
| If it happened… | The gap then |
|---|---|
| Today | $225,000 |
| In 5 years (Jill would be 40) | $273,747 |
| At age 65 (in 30 years) | $729,764 |
| At age 80 (in 45 years) | $1,314,265 |
These figures include future price rises. We assume costs go up 3% a year and savings keep up with prices, with nothing added. Each debt is paid down by its own payments until the loan ends. Paid household help stops when it's no longer needed. Life insurance through work stops counting at 65.
Care costs rise 4% a year — faster than prices in general (3%) — so care costs more the later it is needed.
When an adult dies, the income they earned and the work they did at home stop. The household's costs and plans don't.
How much money the household would need if one of you died, to meet the goal you chose.
How families protect against this. Life insurance protects the people who depend on you, and the income and work at home you provide. It turns a loss no family could save for into a set monthly cost, so the home, your family's plans and daily life can continue.
If one of you died, what should the household's resources do?
We include enough to bring savings up to your emergency-fund goal.
If the household cut back, we assume it could live on 80% of take-home pay (used in “Reduce the risk” below).
Joe's take-home of $7,500 a month would stop. The household's income would drop from $13,750 to $6,250 a month.
Spending would stay about $10,000 a month. The debts would not be paid off, so their payments would continue until each loan ends.
That leaves the household $3,750 a month short at first. After $20,000 of final costs, the $100,000 of life insurance and $20,000 of savings in place would run out in about 2 years 3 months. After that, the household could not cover its spending.
The $575,000 of debts would not be paid off and college ($347,511) would not be funded.
Full protection goes further than getting by. It means replacing Joe's take-home of $7,500 a month for 22 years, paying off the debts, paying for college and covering final costs. That is what the gap below measures.
Your goal: Support the household until the youngest child is 24 (22 years).
In place today: $100,000 of life insurance and $20,000 of cash and investments.
| + Joe's take-home pay that would stop: $7,500 a month for 22 years — the lump sum needed today to replace it | $1,627,075 |
| − Mortgage payment that ends when it is paid off: $3,160 a month for 22 years (the years of support you chose; the loan has 30 years left) | $569,906 |
| − Other debts payment that ends when it is paid off: $1,500 a month for 4 years 2 months* | $70,516 |
| + Mortgage paid off | $500,000 |
| + Other debts paid off | $75,000 |
| + College, at the estimated cost when each child starts, less college savings | $347,511 |
| Child, age 4: $20,870 a year today, rising 5% a year to $41,321 a year when they start in 14 years, × 4 years | $165,285 |
| Child, age 2: $20,870 a year today, rising 5% a year to $45,557 a year when they start in 16 years, × 4 years | $182,226 |
| + Final costs | $20,000 |
| + Emergency fund: 6 months of spending after the payoffs (6 × $5,340 = $32,040), less the $20,000 of cash already set aside | $12,040 |
| = What full protection would take | $1,941,204 |
| − Life insurance in place today (including $100,000 through work) | $100,000 |
| = The gap | $1,841,204 |
These amounts are what you'd need today, all at once. We assume the lost pay would have grown 2% a year, and that the money set aside earns 4% a year while it's paid out. A loan payment is only counted until that loan would have been paid off. We don't count retirement accounts or home equity. College is the estimated cost when each child starts (public, IA, rising 5% a year until then), less what is already saved.
* We estimated the years left on this loan from its balance and payment, leaving out interest. That makes the loan look a little shorter and the amount needed a little higher — so we err on the safe side.
Life insurance through work is counted. It usually ends when the job ends, and it is not counted from age 65.
If Joe died, the household would need $1,841,204 more, beyond the life insurance in place today, in today's dollars.
This pays off the mortgage, as you chose. If you kept the mortgage and kept making the payments instead, the gap would be $2,042,106.
Figures in today's dollars.
| If it happened… | The gap then |
|---|---|
| Today | $1,841,204 |
| In 5 years | $1,726,092 |
| In 10 years | $1,524,015 |
| In 25 years (when Joe would be 60) | $149,330 |
These figures include future price rises. We assume costs go up 3% a year and savings keep up with prices, with nothing added. Each debt is paid down by its own payments until the loan ends. Paid household help stops when it's no longer needed. Life insurance through work stops counting at 65.
Jill's take-home of $6,250 a month would stop. The household's income would drop from $13,750 to $7,500 a month.
Spending would stay about $10,000 a month. The debts would not be paid off, so their payments would continue until each loan ends. The household would also pay $3,000 a month for the household help Jill provides.
That leaves the household $5,500 a month short at first. After $20,000 of final costs, the $50,000 of life insurance and $20,000 of savings in place would run out in about 10 months. After that, the household could not cover its spending.
The $575,000 of debts would not be paid off and college ($347,511) would not be funded.
Full protection goes further than getting by. It means replacing Jill's take-home of $6,250 a month for 22 years, paying for the help Jill provides, paying off the debts, paying for college and covering final costs. That is what the gap below measures.
Your goal: Support the household until the youngest child is 24 (22 years).
In place today: $50,000 of life insurance and $20,000 of cash and investments.
| + Jill's take-home pay that would stop: $6,250 a month for 22 years — the lump sum needed today to replace it | $1,355,896 |
| − Mortgage payment that ends when it is paid off: $3,160 a month for 22 years (the years of support you chose; the loan has 30 years left) | $569,906 |
| − Other debts payment that ends when it is paid off: $1,500 a month for 4 years 2 months* | $70,516 |
| + Mortgage paid off | $500,000 |
| + Other debts paid off | $75,000 |
| + College, at the estimated cost when each child starts, less college savings | $347,511 |
| Child, age 4: $20,870 a year today, rising 5% a year to $41,321 a year when they start in 14 years, × 4 years | $165,285 |
| Child, age 2: $20,870 a year today, rising 5% a year to $45,557 a year when they start in 16 years, × 4 years | $182,226 |
| + Paying for the household help Jill provides ($3,000 a month for 10 years, as a lump sum needed today) | $344,816 |
| + Final costs | $20,000 |
| + Emergency fund: 6 months of spending after the payoffs (6 × $5,340 = $32,040), less the $20,000 of cash already set aside | $12,040 |
| = What full protection would take | $2,014,841 |
| − Life insurance in place today (including $50,000 through work) | $50,000 |
| = The gap | $1,964,841 |
These amounts are what you'd need today, all at once. We assume the lost pay would have grown 2% a year, and that the money set aside earns 4% a year while it's paid out. A loan payment is only counted until that loan would have been paid off. Paid household help is counted rising 3% a year. We don't count retirement accounts or home equity. College is the estimated cost when each child starts (public, IA, rising 5% a year until then), less what is already saved.
* We estimated the years left on this loan from its balance and payment, leaving out interest. That makes the loan look a little shorter and the amount needed a little higher — so we err on the safe side.
Life insurance through work is counted. It usually ends when the job ends, and it is not counted from age 65.
You weren't sure what it would cost to replace the support Jill provides, so we've used $3,000 a month ($36,000 a year) — an estimate. Add your own figure to make this more accurate.
If Jill died, the household would need $1,964,841 more, beyond the life insurance in place today, in today's dollars.
This pays off the mortgage, as you chose. If you kept the mortgage and kept making the payments instead, the gap would be $2,165,743.
Figures in today's dollars.
| If it happened… | The gap then |
|---|---|
| Today | $1,964,841 |
| In 5 years | $1,726,559 |
| In 10 years | $1,356,124 |
| In 25 years (when Joe and Jill would be 60) | $199,330 |
These figures include future price rises. We assume costs go up 3% a year and savings keep up with prices, with nothing added. Each debt is paid down by its own payments until the loan ends. Paid household help stops when it's no longer needed. Life insurance through work stops counting at 65.
Answers that would make the results more accurate. None is required, and we never treat an unknown as zero.
About how much a month would it cost to replace the childcare or household help Jill provides?
Affects: Loss of Life, Ability to Earn
About how much other regular income comes in each month, besides pay?
Affects: Loss of Life, Ability to Earn
Each answer quotes the results for this household.