Finding your Income Replacement Ratio
March 3, 2011 Leave a Comment
Many high earning executives and self-employed professionals often have inadequate coverage for their current income.
Did you know there are over 4.4 million Canadians suffering from a disability*? At age 45 earning $110,000 a year potential earnings to age 65 are $2,809,912**.
This review can be achieved in a minimal amount of time.
- From last year’s T4 slip (line 14), note your income e.g. $110,000 annually.
- From your employee benefits booklet or individual disability insurance policy, note your monthly disability benefits e.g. $3200/month.
- Then calculate your Income Replacement Ratio 3,200 x 12 x 100 / 110,000 = 35%
The Income Replacement Ratio would be 35% of today’s income, could you live on that?
The solution is finding a way to supplement that disparity. Please contact me or your advisor to find out how this can be done.
Email Trent or 902.209.0425
*FUMSI: Disability Statistics Challenges and Sources
**Assuming 2.5% increase every year.
About trentboswick
