Chapter 5: Economic Life Value

Jun Rong Lim
3 min readAug 5, 2021


Welcome to Chapter 5 of Money Moves: Economic Life Value. The Money Moves Series is designed to be actionable with bite-sized knowledge to improve your financial well-being! Let’s explore 1 big picture concept to plan your finances better.

Economic Life Value

The economic life value (ELV) is used to project the total amount of money you will acquire in your lifetime. If your income stops unexpectedly before your retirement age, knowing your ELV tells you how much wealth protection you will need to protect you and your family’s quality of life.

There are various ways your income could stop before retirement:

  1. Job Loss (retrenchment / family commitments / unfit for work / etc.)
  2. Critical Illness
  3. Disability from Accident
  4. Death

Did you know? There are various cognitive biases such as the optimism bias and the anchoring bias that may lead us to think that these are unlikely to happen.

However, statistics in Singapore have shown that:

  • 1 in 4 people get cancer (2021)
  • 21 traffic accidents happen every day, with 1 fatality every 3 days (2018)
  • 1 in 4 people have lost their jobs due to the COVID-19 pandemic (2020)

This means that there is a significant chance of losing your income before retirement, and you should protect it while you still can.

How to calculate your ELV

Find out your ELV in 5 steps:

  1. When do you wish to retire? (Suggested Retirement Age: Between 55 to 70)
  2. How old are you this year?
  3. How many more years will you need to work before retirement?
  4. What is your annual income?
  5. Multiply the number of years left to work by your annual income to get ELV.

There are some assumptions made to simplify the calculation of ELV:

  • No inflation of money
  • Fixed annual income until retirement
  • No taxes to be paid



Jun Rong Lim

Learning today for a better tomorrow. Talks about Finance, Self-Development, Career, and more!