Comprehensive Capital Needs Analysis
C O N F I D E N T I A L
PREPARED BY: Tested on Nov 28, 1998
This Needs Analysis is based upon the following variables.
GENERAL INFORMATION
1. Client's name:
Sample A
2. Client's age:
37
3. Spouse's age:
34
4. Client's monthly
income: 4,750
5. Spouse's monthly
income: 2,200
6. Spouse's other
mo. income: 250
7. Other income pays
to spouse age: 65
8. Spouse's pension
income:
0
9. Is above pension
level:
No
10. # Children less than
18:
2
11. Age youngest child:
4
12. Age next youngest child:
7
FINAL EXPENSES and FUNDING
1. Bequests/Charitable
fund: 7,500
2. Emergency fund:
25,000
3. Adjustment fund:
10,000
4. Projected tax fund:
3,800
5. Funeral expense
fund:
7,500
6. Childrens education
fund: 48,000
ASSETS TO BE LIQUIDATED
1. Real estate (investments):
120,000
2. Annuities:
18,700
3. Stocks and Bonds:
42,500
4. Certificates of
deposit 3,800
5. Mutual funds:
43,750
6. Other liquid assets:
0
7. Life Insurance
on Client: 250,000
LIABILITIES TO BE PAID
1. Mortgage/Future
rents: 123,000
2. Auto loans:
32,000
3. Credit cards:
1,250
4. Investment leverage:
98,500
5. Total of other
debts:
4,500
MONTHLY INCOME NEEDS
1. Children less than
age 18: 5,400
2. Spouse alone:
3,800
3. Spouse at retirement:
3,800
4. Retirement age
of spouse:
65
5. Projected inflation
rate: 3.00 %
6. Discount interest
rate: 7.50
%
7. Illustrated to
age:
80
8. Social Security
benefit based on Client's income
Page 1
DESIRED INCOME FOR YOUR FAMILY WITH CHILDREN AT HOME
UNTIL AGE 18
INFLATION--ADJUSTED SURVIV-
MONTHLY (LESS)
(LESS) (EQUALS) ===================
ING
INCOME SOCIAL
SPOUSE'S INCOME MONTHLY
ANNUAL SPOUSES
DESIRED SECURITY *INCOME
SHORTAGE SHORTAGE SHORTAGE
AGE
5,400 2,246
2,450 704
704 8,448 34
5,400 2,246
2,450 704
725 8,701 35
5,400 2,246
2,450 704
747 8,962 36
5,400 2,246
2,450 704
769 9,231 37
5,400 2,246
2,450 704
792 9,508 38
5,400 2,246
2,450 704
816 9,794 39
5,400 2,246
2,450 704
841 10,087 40
5,400 2,246
2,450 704
866 10,390 41
5,400 2,246
2,450 704
892 10,702 42
5,400 2,246
2,450 704
919 11,023 43
5,400 2,246
2,450 704
946 11,353 44
5,400 1,288
2,450 1,662
2,301 27,607 45
5,400
994 2,450 1,956
2,789 33,465 46
5,400
994 2,450 1,956
2,872 34,469 47
MONTHLY BENEFIT FOR EACH CHILD UNTIL AGE 18 IS..............$
994
MONTHLY BENEFIT FOR SURVIVING SPOUSE (until child's
age 16).$ 994
Spouse's benefits are reduced by $ 1.00 for
every $ 2.00
of the spouse's earnings that exceed $ 9,600
per year.
The Actual Benefit Payable to the surviving
spouse is.....$ 294
MAXIMUM FAMILY BENEFIT (regardless of number of children)...$
2,246
Actual total benefits paid are: The sum of
The Children's
Monthly Benefit (times) The Number of Children
(plus) The
Surviving Spouse's Monthly Benefit Payable
- OR - The
Maximum Family Benefit, WHICHEVER IS LESS.
TOTAL INFLATION ADJUSTED INCOME SHORTAGE IS................$
203,742
(Inflation factor of 3.00 %)
============
Total dollars required in advance to satisfy shortage
is...$ 115,701
(Discounted with interest at 7.50 % per year)
============
* Includes Spouse's and Other monthly income.
Social Security Benefits estimated. Actual
benefit may be more or less.
Page 2
PRE-RETIREMENT INCOME DESIRED FOR YOUR SPOUSE AFTER
CHILDRENS AGE 18
(LESS)
INFLATION---ADJUSTED SURVIV-
MONTHLY SPOUSE'S (EQUALS)
==================== ING
INCOME OR OTHER
INCOME MONTHLY ANNUAL
SPOUSE'S
DESIRED INCOME
SHORTAGE SHORTAGE SHORTAGE
AGE
3,800 2,450
1,350 2,042
24,504 48
3,800 2,450
1,350 2,103
25,239 49
3,800 2,450
1,350 2,166
25,996 50
3,800 2,450
1,350 2,231
26,776 51
3,800 2,450
1,350 2,298
27,579 52
3,800 2,450
1,350 2,367
28,407 53
3,800 2,450
1,350 2,438
29,259 54
3,800 2,450
1,350 2,511
30,137 55
3,800 2,450
1,350 2,587
31,041 56
3,800 2,450
1,350 2,664
31,972 57
3,800 2,450
1,350 2,744
32,931 58
3,800 2,450
1,350 2,827
33,919 59
3,800 2,450
1,350 2,911
34,937 60
3,800 2,450
1,350 2,999
35,985 61
3,800 2,450
1,350 3,089
37,064 62
3,800 2,450
1,350 3,181
38,176 63
3,800 2,450
1,350 3,277
39,322 64
TOTAL INFLATION ADJUSTED INCOME SHORTAGE IS................$
533,245
(Inflation factor of 3.00 %)
============
Total dollars required in advance to satisfy shortage
is...$ 109,871
(Discounted with interest at 7.50 % per year)
============
Page 3
RETIREMENT INCOME DESIRED FOR YOUR SPOUSE AT RETIREMENT
AGE OF 65
(LESS)
INFLATION--ADJUSTED SURVIV-
MONTHLY (LESS) RETIREMENT
(EQUALS) =================== ING
INCOME SOCIAL
OR PENSION INCOME MONTHLY
ANNUAL SPOUSE'S
DESIRED SECURITY INCOME
SHORTAGE SHORTAGE SHORTAGE AGE
3,800 1,326
0 2,474
6,185 74,222 65
3,800 1,326
0 2,474
6,371 76,449 66
3,800 1,326
0 2,474
6,562 78,743 67
3,800 1,326
0 2,474
6,759 81,105 68
3,800 1,326
0 2,474
6,961 83,538 69
3,800 1,326
0 2,474
7,170 86,044 70
3,800 1,326
0 2,474
7,385 88,625 71
3,800 1,326
0 2,474
7,607 91,284 72
3,800 1,326
0 2,474
7,835 94,023 73
3,800 1,326
0 2,474
8,070 96,843 74
3,800 1,326
0 2,474
8,312 99,749 75
3,800 1,326
0 2,474
8,562 102,741 76
3,800 1,326
0 2,474
8,819 105,823 77
3,800 1,326
0 2,474
9,083 108,998 78
3,800 1,326
0 2,474
9,356 112,268 79
3,800 1,326
0 2,474
9,636 115,636 80
TOTAL INFLATION ADJUSTED INCOME SHORTAGE IS...............$
1,496,092
(Inflation factor of: 3.00 %)
============
Amount of dollars required in advance to satisfy the
shortage
when discounted with interest at 7.50 % per annum
is......$ 93,350
============
Social Security Benefits estimated. Actual benefit
may be more or less.
Page 4
THE FINAL PAGE
ASSETS TO BE LIQUIDATED AT DEATH AND PRESENT INSURANCE
BENEFITS
Real Estate Investments
: $ 120,000
Certificates of Deposit
:
3,800
Stocks and Bonds
:
42,500
Mutual Funds
:
43,750
Annuities (IRA, KEOGH, etc.)
:
18,700
Other Liquid Assets
:
0
Present Life Insurance
:
250,000
Social Security Death Benefit
:
255
============
* TOTAL LIQUID ASSETS AVAILABLE AT DEATH $
479,005 $ 479,005
============ ============
IMMEDIATE CASH NEEDS AT DEATH
Projected Taxes (Estate, Income) :
$ 3,800
Funeral Expense Fund
:
7,500
Adjustment Fund
:
10,000
Children's Education Fund
:
48,000
Emergency Fund
:
25,000
Bequests and Charitable Funds
:
7,500
Mortgage or Future Rents Fund
:
123,000
Auto Loan(s)
:
32,000
Credit Cards
:
1,250
Investment Leverage
:
98,500
Total Other Debts
:
4,500
============
TOTAL IMMEDIATE CASH
NEEDS AT DEATH $ 361,050 $
361,050
============ ============
INFLATION ADJUSTED & DISCOUNTED INCOME SHORTAGES
Page 2-Children age 18 or less :
115,701
Page 3-Spouse Pre-Retirement
:
109,871
Page 4-Spouse at Retirement Age :
93,350
(see referenced page number for details)
============
** TOTAL INCOME SHORTAGES
: $ 318,922
$ 318,922
=======================================================================
TOTAL IMMEDIATE CASH and INCOME NEEDS AT DEATH $
679,972
TOTAL CASH AVAILABLE AT DEATH $ 479,005
=======================================================================
TOTAL ADDITIONAL DOLLARS REQUIRED FOR DESIRED NEEDS----->
$ 200,967
=======================================================================
*Any assets NOT listed above are to be conserved.
**ALL future income needs are based upon INFLATION
at 3.0% and then
DISCOUNTED with INTEREST of 7.50% to todays
net present value.
Needs analysis is a continuing and changing
process. Future results
may be different from the above illustration
due to your changing
needs, future inflation, interest earned and
other variables.
************* All dollar amounts are in today's dollars.
*************
