Patricia currently earns $2,500 per month and takes home $2,200. Her monthly expenses total $1,680. Her...

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Patricia currently earns $2,500 per month and takes home $2,200. Her monthly expenses total $1,680. Her employer provides 5 sick days per year and a short-term disability policy that will pay benefits after 30 days of disability. The policy will pay 60 percent of her gross income for up to 12 months. The disability income payments aren't taxable because she used after-tax dollars to pay the premiums. If Patricia wants to have sufficient liquid assets to cover the short-term disability needs that aren't met by her employer's plan, how much should she set aside for this purpose, assuming she might be disabled for a period of one year? Patricia currently earns $2,500 per month and takes home $2,200. Her monthly expenses total $1,680. Her employer provides 5 sick days per year and a short-term disability policy that will pay benefits after 30 days of disability. The policy will pay 60 percent of her gross income for up to 12 months. The disability income payments aren't taxable because she used after-tax dollars to pay the premiums. If Patricia wants to have sufficient liquid assets to cover the short-term disability needs that aren't met by her employer's plan, how much should she set aside for this purpose, assuming she might be disabled for a period of one year?

Answer rating: 100% (QA)

To determine how much Patricia should set aside for shortterm disability needs we need to calculate ... View the full answer