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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.

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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 type of investments you select. For example, from December 1999 to December 2009, the average annual compounded rate of return for the S&P 500 was -0.6%, including reinvestment of dividends. From January 1970 to December 2009, the average annual compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 10.1% (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 1% 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
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), which has a long-term average of 3.1% annually, from 1925 through 2009. The CPI for 2009 was -1.0%, 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.

Information and interactive calculators are made available to you as self-help tools for your personal independent use and are not intended to provide investment advice. We can not and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.