Financial Needs Analysis

Income Protection Needs Calculation:

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Expense Rate (based on Income bracket)

Monthly Expense Rate = Monthly Income x Expense Rate
Annualized Monthly Expense Rate = 12 x MER = Annual Expenses

Insurance Need = 5 x AMER

5, because it takes on average, about 5 years before a family recovers from the
passing of a breadwinner.

Retirement Need Calculation:

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Pension Period = 80 - Retirement Target Age

Retirement Income = Pension Period x AMER

Compute Present Value of Retirement Income using Risk Free Rate and Inflation

Health Need Calculation:

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Based on Income Bracket