Appendix B.1 Estimates of Social Security Benefits for the Three Major Social Security Programs Present Annual Earnings $65,000 $80,000 $50,000 595,000 $120,00 $ 1,480S U 1,890 $22,680 S $ 2,640 $ 2,940 $17,760 Monthly Retirement Benefits at Age 67 in Today's Dollars Per month Per year As a percentage of income Monthly Retirement Benefits at Age 67 in Future Dollars Per Month 2,260 $ 27,120 47% $ 2,450 $29.400 37% $31.680 $ 35,280 29% 51% 45% 2396 $.860 S 10,410 $ 11,200 $ 6,170 $74,040 $ 9,550 W $114,600 5 12,440 $149,280 594,320 $124,920 5 134.400 1.330 1.690 $ 7,040 $ 2,460 $ 2,280 $ 27,360 $15.960 >20,280 5 24.480 5 29.520 $ 2,720 $ 32,640 29% 34% 31% 3,060 5 3.420 3690 $4090 $41.040 344.780 5 48,960 41% Per Year Monthly Disability Benefits If You Became Disabled in 2018 Individual benefit per month Individual benefit per year As a percentage of income Maximum family benefit per month Maximum family benefit per year As a percentage of income Monthly Survivor's Benefits if You Died in 2018 Individual benefit per month Individual benefit per year As a percentage of income Maximum family benefit per month Maximum family benefit per year As a percentage of income $ 21,680 S 2,090 $ 25,080 21% 249 700 $ 4.870 S52300 58.440 eBook Do the Math 12-2 Life Insurance Needs for a Young Married couple Amy and Mack Holly from Rapid City, South Dakota, have been married for three years. They recently bought a home costing $212,000 using a $190,000 mortgage. They have no other debts. Mack earns $64,000 per year, and Amy earns $71,000. Each has a retirement plan valued at approximately $30,000. They recently received an offer in the mail from their mortgage lender for a mortgage life insurance policy of $190,000. Their only life insurance currently is a $22,000 cash-value survivorship joint life policy. They each would like to provide the other with support for at least five years if one of them should die. a. Assuming $13,000 in final expenses and $20,000 allocated to help make mortgage payments, calculate the amount of life insurance they should purchase using the needs based approach. Also assume that both Mack and Amy would replace 75 percent of their individual current income for five years. Use a 5 percent after-tax, after Inflation rate of return for your calculations. (Use Appendix B.) Do not round your intermediate calculations. Round your answers to the nearest dollar. Life insurance needed (Mack): $ Life insurance needed (Amy): 5 b. How would their needs change if Amy became pregnant? The input in the box below will not be graded, but may be reviewed and considered by your instructor Appendix B.1 Estimates of Social Security Benefits for the Three Major Social Security Programs Present Annual Earnings $65,000 $80,000 $50,000 595,000 $120,00 $ 1,480S U 1,890 $22,680 S $ 2,640 $ 2,940 $17,760 Monthly Retirement Benefits at Age 67 in Today's Dollars Per month Per year As a percentage of income Monthly Retirement Benefits at Age 67 in Future Dollars Per Month 2,260 $ 27,120 47% $ 2,450 $29.400 37% $31.680 $ 35,280 29% 51% 45% 2396 $.860 S 10,410 $ 11,200 $ 6,170 $74,040 $ 9,550 W $114,600 5 12,440 $149,280 594,320 $124,920 5 134.400 1.330 1.690 $ 7,040 $ 2,460 $ 2,280 $ 27,360 $15.960 >20,280 5 24.480 5 29.520 $ 2,720 $ 32,640 29% 34% 31% 3,060 5 3.420 3690 $4090 $41.040 344.780 5 48,960 41% Per Year Monthly Disability Benefits If You Became Disabled in 2018 Individual benefit per month Individual benefit per year As a percentage of income Maximum family benefit per month Maximum family benefit per year As a percentage of income Monthly Survivor's Benefits if You Died in 2018 Individual benefit per month Individual benefit per year As a percentage of income Maximum family benefit per month Maximum family benefit per year As a percentage of income $ 21,680 S 2,090 $ 25,080 21% 249 700 $ 4.870 S52300 58.440 eBook Do the Math 12-2 Life Insurance Needs for a Young Married couple Amy and Mack Holly from Rapid City, South Dakota, have been married for three years. They recently bought a home costing $212,000 using a $190,000 mortgage. They have no other debts. Mack earns $64,000 per year, and Amy earns $71,000. Each has a retirement plan valued at approximately $30,000. They recently received an offer in the mail from their mortgage lender for a mortgage life insurance policy of $190,000. Their only life insurance currently is a $22,000 cash-value survivorship joint life policy. They each would like to provide the other with support for at least five years if one of them should die. a. Assuming $13,000 in final expenses and $20,000 allocated to help make mortgage payments, calculate the amount of life insurance they should purchase using the needs based approach. Also assume that both Mack and Amy would replace 75 percent of their individual current income for five years. Use a 5 percent after-tax, after Inflation rate of return for your calculations. (Use Appendix B.) Do not round your intermediate calculations. Round your answers to the nearest dollar. Life insurance needed (Mack): $ Life insurance needed (Amy): 5 b. How would their needs change if Amy became pregnant? The input in the box below will not be graded, but may be reviewed and considered by your instructor