What your group LTD actually pays after tax, and the gap it leaves.
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Professional Financial Tools
8/25/2026
Housing, food, utilities, insurance, minimum debt payments, childcare. What you cannot stop paying.
Federal plus state. Used to work out what a taxable benefit is actually worth in hand.
Most group plans replace 60% of base salary — and usually only base, excluding bonus and commission.
Nearly every group policy caps the monthly benefit. High earners hit this cap and end up replacing far less than the stated percentage.
This is the single most misunderstood point in disability insurance. If the employer pays the premium, your benefit is TAXABLE. If you pay with after-tax dollars, it is tax-free.
What bridges the elimination period before benefits start.
The waiting period before benefits begin. A longer one lowers the premium but demands more savings.
Your essential expenses of $4,200 less $3,420 of after-tax benefit. An individual disability policy bought with after-tax dollars pays tax-free, so you need roughly this much of additional monthly benefit — not more. This is an estimate for planning, not an insurance quote. Actual pricing is set by the insurer or, in promulgated-rate states, by the state regulator.
60% of $7,500 monthly salary. Check whether your plan counts bonus and commission — most cover base salary only.
Because your employer pays the premium, the benefit is TAXABLE income. At a 24% marginal rate your stated 60% benefit is worth 45.6% of your salary in hand. If your employer offers a "gross-up" option — paying tax on the small premium yourself so the large benefit arrives tax-free — it is almost always worth taking.
What you would actually live on as a share of current gross salary. People routinely assume a 60% policy means 60% — after tax and the monthly cap, it frequently lands closer to 40%.
Your $15,000 of savings covers the 90-day wait before benefits begin.
Definition of disability matters more than the benefit amount. "Own occupation" pays if you cannot do YOUR job; "any occupation" pays only if you cannot do any job you are reasonably suited for, and is far harder to claim on. Group policies commonly switch from own-occ to any-occ after 24 months — read that clause before assuming you are covered long-term.