John Wilson is a 42 year-old computer programmer, husband and father of four. He wants to use the capital retention approach to determine how much life insurance he should purchase. Because of his $105,000 salary and their four children, his wife does not work outside the home. The family’s current annual living expenses are approximately $75,000, including $8,000 in annual IRA contributions. He prefers to use the capital retention approach so that he can be reasonably assured that his family will not exhaust the proceeds of his policy; however, he also wants to consider the possible reduction in expenses and apply a 70% replacement ratio to the calculation. Calculate John's insurance need using the capital retention approach, an after-tax discount rate of 5.5%, and assume end of period payment of benefits.