Financial Compass:Survivor Needs Analysis Results Screens

From UngerKnowledgeBase

The Survivor Needs Analysis consists of the following illustrations:

Cash Needs
Sources of Income Available and Projected Annual Income Shortfalls
Common Types of Life Insurance

Cash Needs

This analysis illustrates the financial impact a death can have on the surviving family members. Funds could be needed for cash needs and the surviving family's ongoing income needs. Cash needs may include funds to pay for final expenses, pay off debts and mortgages, and ensure funding for your children's education. The information shown in this analysis is as follows:

Name	Description
Total Cash Needs	The sum of the cash need in the event of a death to fund the following: Final Expenses, Mortgage or Rent Fund, Debt Fund and College Fund.
Final Expenses	The amount entered in the 'Provide funds for a Final Expenses and Ready Cash Fund' field in the Survivor Needs screen.
Rent Fund	The amount needed to fund monthly rental expenses for a specified number of years. This row appears when you select 'No' in the 'Do you own your home?' field in the Financial Information - Assets and Liabilities screen. To calculate the Rent Fund the data below is considered. Monthly Rent in the Financial Information - Assets and Liabilities screen Number of Years to provide for Survivor's Rent Fund - in the Assumptions screen.
Mortgage Fund	The amount needed to pay off the current balance of all mortgages entered in the Financial Information - Assets and Liabilities screen. This row appears when you select 'Yes' in the 'Do you own your home?' field in the Financial Information - Assets and Liabilities screen.
Debt Fund	The amount needed to pay off the current balance of all debts entered in the Financial Information - Assets and Liabilities screen.
College Fund	The amount needed to fund the combined college costs of all children. The College Fund is equal to the combined annual cost in todays dollars. The College Cost Inflation Rate and other adjustments are not applied.
Less Assets	The total of all assets available to the survivors in the event of a death. This amount includes the 'Current Value' entered for all Savings and Investments and Retirement Assets in the Financial Information - Assets and Liabilities screen and 'Current Savings Balance' for children entered in the College Funding screen for children with college costs that occur in present or future years.
Less Insurance	The total of all life insurance death benefits payable in the event of a death, and is based on the policy information entered in the Life Insurance screen.
(Shortfall) Surplus from Cash Needs	The asset balance that remains after funding the cash needs of the survivors in the event of a death. A shortfall indicates the additional capital that is required to fund the cash needs of the survivors. A surplus indicates the remaining assets after funding cash needs that are available for the annual income objective of the survivors.

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Sources of Income Available and Projected Annual Income Shortfalls

This analysis illustrates the annual income objective of the survivors, the income and assets applied to this objective each year, and any resulting shortfalls when income and assets are less than the annual income objective. The information shown in this analysis is as follows:

Name	Description
Capital Required for Income Needs	The amount needed in the event of a death to fund all future income shortfalls. This is the present value of all future income shortfalls, and is based the shortfalls shown in the (Asset Liquidations)/Surplus column and the Assumed Rate of Return on Survivor's Assets entered in the Assumptions screen.
Shortfall from Cash Needs	The shortage of assets to meet the survivors cash needs in the event of a death as shown in the Survivor Needs - Cash Needs illustration discussed above. The difference between cash needs and the assets and life insurance benefits available to meet those needs.
Additional Capital Required	The sum of Capital Required for Income Needs and Shortfalls from Cash Needs. This is the additional amount needed at death to fund shortfalls from cash needs and future income needs. Present value and growth rate assumptions are based on the 'Assumed Rate of Return on Survivor's Assets' entered in the Assumptions screen.
Remaining asset balance after funding cash needs	The net balance of assets and life insurance death benefits that remain after funding the cash needs in the event of a death. The remaining asset balance is the total amount available to fund the annual income objective after annual income sources are applied. This is the same amount shown in the 'Surplus from Cash Needs' row in the Survivor Needs Analysis - Cash Needs illustration.
Survivor's Age	The age of the surviving co-client.
Year	The year of the analysis. This column is shown when the client is single and hidden when the client is married or domestic partner, as selected on the Personal Information screen.
Income Objective	The annual income objective of the survivors. The amounts shown here are based on the client and co-client annual salaries entered in the Financial Information - Income screen, and the income replacement needs 'With children at home' and 'No children at home' entered in the Survivor Needs screen. The annual income objective increases each year by the General Inflation Rate entered in the Assumptions screen. 'With children at home' applies in years that at least one child is age 18 or younger, and 'No children at home' applies in years when all children are age 19 or older.
Social Security	The social security benefits received by the survivors. The amounts shown here are based on client and co-client information entered in the Financial Information - Income screen, and includes the benefits payable to the surviving children and spouse caring for minor children, and the retirement benefits payable to the surviving co-client. Social security benefits increase each year by the Social Security Benefits Cost of Living Increase entered in the Assumptions screen.
Salary / Income	The Annual Salary received by the surviving co-client as entered in the Financial Information - Income screen. This amount increases each year by the General Inflation Rate entered in the Assumptions screen.
Other Income	The income received by the survivors as entered under 'Other Income' on the Financial Information - Income screen. This amount includes all income 'owned' by the surviving spouse, and any income owned by the decedent when a value greater than 0% is entered in the field named 'Percentage available to survivors in the event of death of the owner.'
Investment Income	The income coming from the annual growth of assets. This amount is based on the Asset Balance in the preceding year and the 'Assumed Rate of Return on Survivor's Assets' entered in the Assumptions screen. In the first year this income is based on the amount shown in the 'Remaining asset balance after funding cash needs' label above the spreadsheet.
(Asset Liquidations)/Surplus	The spend-down or build-up of assets each year to achieve the income objective of the survivors. The spend-down of assets is shown as a negative value, for example ($10,000), and indicates the amount of assets that must be withdrawn to satisfy the net income objective after Salary, Social Security, Other Income and Investment Income. This amount is subtracted from the Asset Balance column. When the Asset Balance column is less than $0, a negative value indicates the overall shortfall of income and assets to meet the income objective that year. The build-up of assets is shown as a positive value and indicates the surplus income from Salary, Social Security, Other Income and Investment Income after fully satisfying the income objective for the survivors. This amount is added to the Asset Balance column.
Asset Balance	The end of year asset balance after adjustments for the spend-down or build-up shown in the (Asset Liquidations)/Surplus column. A negative value indicates the cumulative asset shortfall for the survivors. A positive value indicates the asset balance available to meet the survivors income objective in the next year.