This calculator works out the shortfall your household would face if you died, after the pension survivor benefit, Social Security survivor benefits, the survivor’s own income and the assets you already hold. It answers it three ways rather than giving one number.
How much life insurance do I actually need?
Multiplying income by ten is a shortcut, not an analysis. This one works the other way: it starts from what the household would actually be short each year, then subtracts the pension survivor benefit, Social Security, the survivor’s own income, what you have already saved, and the coverage you already hold. It can return zero, and for a household with a large pension and a large balance it can.
Indicative, not a personal assessment. The figures above are arithmetic on what you entered, and they are a starting point rather than an assessment of your own circumstances. We can cover that in a short conversation.
This calculator uses no published figures. It is arithmetic on what you enter: the capital needed is the present value of the annual gap over the years you choose, at the real return you choose. That return is an assumption, not a projection. The reasoning behind each input is on the life insurance page.
How it works
Why the pension survivor election comes first
For a household with a public pension, the survivor election is usually the largest single lever, and it is made once at filing and cannot be changed afterwards. Electing a survivor option reduces the pension for life in exchange for continuing payments to your spouse. Insurance is the alternative to that reduction, not an addition to it, and the comparison only works if you know both numbers.
That is why this tool asks what the pension pays the survivor before it asks anything about insurance. If the survivor benefit already covers the gap, the honest answer is that no policy is needed.
Three answers, not one
The three figures differ in what they assume about how long the money has to last and whether the survivor keeps working. They will not agree, and the spread between them is the useful part: it tells you how sensitive the answer is to assumptions you cannot verify today.
Questions
Common questions
Should the answer be term or permanent cover?
That is a separate question from how much, and it turns on how long the need lasts. A need that ends when a mortgage is paid and a pension survivor benefit starts is a term-shaped need. A need that exists whenever you die is not.
Does this account for estate tax?
No. Life insurance proceeds are generally free of income tax, but a policy you own is in your taxable estate for New York purposes, which matters once an estate approaches the exclusion. That is covered on the estate tax cliff calculator and the estate page.
Check this against your own numbers.
The pension survivor election and the insurance decision are the same decision, and only one of them can be changed after you file. We can cover it in a short conversation, at no charge and with no obligation.
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Booking is handled through Rosefinch Investment Advisors. LI Retirement is not affiliated with, endorsed by, or sponsored by any government agency, retirement system, plan sponsor, or employer named on this site.