Free Income Replacement calculator with clear step-by-step results.
Treats income replacement as an inflation-linked annuity problem rather than a multiple-of-salary rule. The lump sum is the present value of the required income stream discounted at the real return, which is why a modest change in the assumed return moves the answer substantially over a twenty-year horizon.
Real return
Real = (1 + nominal return) / (1 + inflation) - 1
Capital required
Capital = annual income needed x (1 - (1 + real)^-years) / real
Not insurance or financial advice. Actual cover needs depend on debts, dependants, state benefits and existing employer provision. Review with a licensed adviser.
Multiples ignore how long support is needed, what the survivors' own income is, and what assets already exist. They can be wildly wrong in either direction.
Rarely. One fewer adult means lower household costs, and some expenses such as commuting disappear. Sixty to eighty percent is the usual planning range.