Many people’s current income may be lower than their optimal earning potential. They need years of experience, specialized education or state licensing to achieve their optimal income. In many cases, it takes years for people to reach their highest earning capacity.
Not everyone achieves optimal income because they may have setbacks that prevent them from continuing to develop their careers. Significant injuries can cost people wages during their recovery, as they may not be able to work. In many cases, injuries can have a chilling effect on the long-term earning potential of an individual. Those attempting to negotiate insurance settlements or pursue personal injury compensation may need support as they seek to recover lost income and future earning capacity.
How do people calculate earning capacity?
Lost wages are relatively easy to calculate. People simply need to determine how many days or hours of paid work they missed and apply their current rate of pay. Lost earning potential or future earning capacity is a bit more difficult to calculate.
People usually need to look at salary ranges for the positions that they might have obtained if they could continue developing their careers. They also need to consider the value of workplace benefits. Benefits can be worth as much as a third of a worker’s base pay. Additionally, people have to consider cost-of-living wage increases that employers may provide as they continue to work at the company.
All of that can be very challenging, especially for those already coping with financial stress and medical complications. Attorneys are in a position to support clients throughout this process. They have access to resources that can help them more effectively estimate lost future income or earning capacity.
They can properly document the amounts that they estimate, which can make it easier for them to negotiate with insurance providers or justify the amount of compensation sought in a lawsuit. Lost earning potential is often one of the biggest single contributing elements to personal injury and wrongful death lawsuits. In many cases, lost future earning potential can be so substantial that it may exceed the amount of insurance available after a serious injury occurs.
Having support when estimating the financial impact of injuries can make a major difference. Accurately calculating lost future earning capacity can be critical for those pursuing personal injury compensation.