Survivor Reports

Survivor reports are provided for spouses/partners. They show how spouses/partners will fare in the event that their companions pass away before their maximum ages of life. The survivor reports of the surviving spouse/partner are generated based on an assumed age of death of the decedent. The first time you run ESPlanner, the survivor reports are computed assuming that each spouse/partner dies at his or her current age. Survivor reports start in the first year a spouse/partner is a widow or widower, which is the year after his or her spouse/partner dies.

Survivor’s Annual Recommendations Report

This report shows recommendations for saving, consumption, and life insurance for surviving spouse/partners. All amounts are in today’s dollars.

Saving in a particular year equals the survivor’s total income less taxes and spending. Spending refers to expenditures on consumption, special expenditures, housing, insurance premiums, funerals and bequests in excess of home equity used to cover those expenses, and contributions to retirement accounts. Saving does not include increases in home equity arising from paying off mortgages or other housing loans.

This report shows recommended annual holdings of term life insurance for surviving spouses/partners for each year in which they may be alive. The life insurance premiums indicated in this report reflect typical term life insurance rates prevailing in the United States. These rates may differ from those being charged by your family’s insurance company. In addition, in the case of whole life insurance policies, the insurance premiums will be higher because in purchasing a whole life policy one is, in effect, purchasing both a term life insurance policy and opening up a savings account; i.e., a whole life policy represents the combination of a term insurance policy and a savings account.

Households can use whole life insurance policies as well as term insurance policies to achieve the recommended amounts of term life insurance. Whole life policies combine term insurance with a savings account. In paying whole life insurance premiums, purchasers of whole life policies are, in effect, purchasing a term insurance policy plus making a contribution to a saving account. The amount of term insurance contained in a whole life policy can be calculated by subtracting the face value of the policy from its cash value.

Survivor’s Regular Assets Report

This report traces the evolution through time of the surviving household’s regular assets assuming it the program’s recommendations and the input assumptions end up being correct. All amounts are in today’s dollars. The change in regular assets from one year to the next equals saving. Saving, in turn, equals total income minus the sum of spending and taxes.

Regular assets will be zero in the last year that the surviving spouse/partner is alive assuming that he or she lives until his or her maximum age of life. The survivor’s spending in the year that he or she reaches his or her maximum age of life includes the survivor’s funeral and bequest to the extent that these expenditures are not covered by equity from the sale of the survivor’s homes.

ESPlanner uses equity from the sale of your homes to cover these expenditures in the last year that the survivor may be alive. If the survivor’s housing equity in that last year exceeds bequests and funeral expenses in that year, excess funerals and bequests will be zero and your household will leave an estate with positive housing equity. If the survivor’s housing equity in that last year is less than funeral and bequest expenses in that year, all of the survivor’s home equity will be used to cover these expenditures and no housing equity will be included in the survivor’s estate.

Survivor’s Income Report

This report details the survivor’s total income. All amounts are in today’s dollars. Total income is broken down into the survivor’s non-asset income, special receipts, and the survivor’s regular asset income.

Survivor’s Spending Report

This report decomposes the survivor’s total recommended spending between consumption, special expenditures, housing expenditures, life insurance premiums, contributions to retirement accounts, and funerals and bequests in excess of home equity used to cover those expenses. Special expenditures in a particular year are the total of all special expenditures for that year listed for the survivor in the Special Folder listed under Contingent Planning. Housing expenditures include all housing-related payments on your household’s principal residence and vacation home. These payments include rent, other rental expenses, mortgage payments, property taxes, maintenance and condo fees, homeowner’s insurance, and net home purchases. Life insurance premiums refer to payments needed by the survivor to purchase ESPlanner’s recommended amounts of insurance.

Survivor’s Non-Asset Income Report

This report lists the survivor’s annual non-asset income in each future year in which the survivor may be alive. Non-asset income includes labor income, annuity income, pension income, and Social Security benefits. Total non-asset income in a particular year is the sum of labor income, pension income, and Social Security benefits in that year.

This report shows in today’s dollars federal income, state income, FICA, and total taxes for the survivor in every year to which the survivor may live. Federal income taxes are calculated taking into account the Earned Income Tax Credit, the Child Care Credit, the low-income Retirement Account Contribution Credit, and the taxation of Social Security benefits. ESPlanner determines whether it is best in each year to itemize deductions or take the standard deduction. This determination is based on the household’s composition and its itemizable deductions, including its mortgage interest payments, its property tax payments, and its state income tax payments. There is also an adjustment for the fraction of regular asset income that is accruing in the form of capital gains.

Survivor’s Housing Report

This report shows the survivor’s housing expenses and housing finances in each year to which the survivor may live. The report combines information provided about your primary and vacation homes. For example, the value of rent in a particular year is the sum of the rental payments, if any, you specified that you would make in that year on your primary home and vacation home. Similarly, the value of mortgage balance indicates the sum of the outstanding mortgage balances on your primary and vacation homes.

The report indicates for each year the amount the survivor will spend on rent, other rental expenses, mortgage payments, property taxes, maintenance and condo fees, homeowner’s insurance, and net home purchases. The sum of these housing expenses constitutes the survivor’s housing expenditures, which are also shown in the report. It also indicates the survivor’s home equity and mortgage balance. Note that the values of reported housing expenses and finances will vary from one year to the next as, for example, the survivor pays off mortgages or change homes. The report also displays the combined mortgage balance and home equity values of primary and vacation homes.

Survivor’s Retirement Accounts Report

This report traces the evolution through time of the survivor’s retirement account assets. All amounts are in today’s dollars. The change in retirement accounts from one year to the next equals retirement account saving. This saving equals income earned on retirement account assets plus retirement account contributions less retirement account withdrawals.

Survivor’s Estate Report

This report shows how much the survivor will leave as an estate if he/she dies prior to his/her maximum age of life. The regular estate is calculated by adding the survivor’s net worth and the term life insurance and then subtracting from this total the special bequests, funeral expenses, and estate taxes of these decedents. The estate reports also show the retirement account estate - the amount of retirement account assets left to the survivor’s heirs in the event that the survivor passes away in a given year.

Survivor’s Social Security Benefits Report

This report shows the survivor’s net social security benefit. This net benefit is the sum of the survivor’s social security retirement benefit, the survivor’s survivor benefits, the survivor’s mother/father benefits, and the survivor’s children’s benefits less that reduction in benefits arising from applying Social Security’s earnings test.