Brad and Becky are both 31, and expecting their first baby, which has led them to consider their financial situation, such as the financial implications if one of them died or became sick or injured and could no longer work. They are both in careers they enjoy and each earn $60,000 gross salary. Brad's monthly take home pay is $4,000 Becky's monthly take home pay is $3,200 Their financial statements are as follows. Monthly Cash Flow After tax income Mortgage 3% int Car loan 4% int Car ins and exp 2 cars Groceries Recreation RRSPS Brad TFSAs Other living Total expenses Net Cash Flow 7,200 2,900 540 800 900 200 400 200 1,260 7,200 0 Balance Sheet Assets House Brad's RRSP Brad's TFSA Becky's TFSA Brad's car Becky's car Total Assets Liabilities Brad's car loan Mortgage Total Liabilities Net Worth 680,000 20,000 12,000 15,000 32,000 12,000 771,000 26,000 520,000 546,000 225,000 Begining of range End of range to 12,000 12,000 to 20,000 20,000 to 48,000 48,000 to 95,000 95,000 to 148,000 148,000 to 210,000 210,000 + above Tax at start of range Marginal rate 0% 15% 1,200 22% 7,360 30% 21,460 40% 42,660 45% 70,560 50% For each of the following questions select the CLOSEST answer. (note, the answers are rounded to the nearest ten for numbers under 10,000 and to the neasest thousand for numbers over 1 million.) Based on their cash flow statement, what is the minimum disposable income they need to make ends meet, without changing their lifestyle? Becky's LTD plan pays 60% of her gross income. What LTD insurance benefit can she expect on a tax free basis? If Becky's LTD paid her a $4,000 a month taxable benefit, how much monthly income would this provide her on an after tax basis? Brad has no disability insurance coverage from his work. If Brad can qualify for personal Dl coverage of 90% of his after tax income, what amount would this be? If Brad and Becky wanted to each have enough life insurance on themselves to provide a $60,000 income to the family indefinitely, and assuming a long term annual real rate of return of 2.2% on the capital, how much life insurance would they each need? (nearest thousand) How much life insurance would they need if they assumed that providing 25 years of $60,000 income was enough, and that they could be sure of a 2.2% annual real rate of return after tax, on the capital? (nearest thousand) Choose... Choose... Choose... Choose... Choose... Choose...