Human Life Value

One of your most important assets is your ability to earn a paycheck. This calculator is designed to help you understand today's value of your future earning. Use this calculator to determine your economic value for your loved ones... your Human Life Value.

Your Human Life Value was calculated as HUMAN_LIFE_VALUE1

Your Human Life Value of HUMAN_LIFE_VALUE1 is for an annual income of CURRENT_ANNUAL_INCOME and includes an annual income growth of EXPECTED_INCOME_GROWTH. This assumes you have YEARS_UNTIL_RETIREMENT years until your retirement and an annual return on investments of RETURN_ON_INVESTMENTS. If you also include EXPECTED_ANNUAL_INFLATION_RATE annually for inflation, your Human Life Value changes to HUMAN_LIFE_VALUE2. **GRAPH**
Results Summary
Years until retirement YEARS_UNTIL_RETIREMENT
Current annual income CURRENT_ANNUAL_INCOME
Return on investments RETURN_ON_INVESTMENTS
Expected annual inflation rate EXPECTED_ANNUAL_INFLATION_RATE
Expected income growth EXPECTED_INCOME_GROWTH
Human Life Value adjusted for income growth HUMAN_LIFE_VALUE1
Human Life Value adjusted for income growth and inflation HUMAN_LIFE_VALUE2

Human Life Value Definitions

Years until retirement
Number of years before retirement.
Current annual income
Your current annual income. If you are married, this should not include any income from your spouse.
Return on investments
This is the annual rate of return you expect from your investments after taxes. The actual rate of return is largely dependent on the types of investments you select. The S&P 500® for the 10 years ending Dec. 31st, 2013 had an annual compounded rate of return of 7.3%, including reinvestment of dividends. From January 1970 through the end of 2013, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.6% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a bank may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.

It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that funds and/or investment companies may charge.

Insurance products may additionally include mortality, expense risk charges, cost of insurance, administrative, and surrender charges that will have a significant impact on the total rate of return for the investment.

Expected annual inflation rate
This is what you expect for the average long-term inflation rate. A common measure of inflation in the U.S. is the Consumer Price Index (CPI). From 1925 through 2013 the CPI has a long-term average of 3.0% annually. Over the last 40 years highest CPI recorded was 13.5% in 1980. For 2013, the last full year available, the CPI was 1.7% annually as reported by the Minneapolis Federal Reserve.
Expected income growth
Annual percent increase you expect in your annual income.
Human life value
This is the total amount you would need invested today, to equal the total earnings of a person's lifetime. Two values are calculated for you. The first includes only your expected income growth, the second includes your expected income growth plus the impact of inflation.


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