Bridging the gap between assets and real-world needs.
Eleanor inherited a $1.8M Traditional IRA and $450K in taxable accounts after her husband's passing. Her primary residence needs a new roof, estimated at $45,000. She's grappling with whether to use taxable funds or withdraw from her IRA, considering the tax implications and the actual cash value of her existing homeowners insurance policy to offset the roof replacement cost. Furthermore, she needs a sustainable income plan to cover living expenses and maintain her lifestyle throughout retirement.
We utilized the Actual Cash Value Calculator to determine the recoverable amount from Eleanor's homeowner's insurance for the roof, accounting for depreciation. The calculator revealed an ACV of $28,000, significantly less than the $45,000 replacement cost. Using the Tax Equivalent Yield Calculator, we compared the after-tax cost of withdrawing from the IRA versus selling taxable assets to cover the remaining $17,000. We also employed the Times Interest Earned Ratio Calculator to assess the sustainability of various income stream options.
The Actual Cash Value Calculator provided a clear, defensible valuation for insurance claims. Tax Equivalent Yield Calculator helped optimize asset allocation considering taxes. Times Interest Earned Ratio Calculator confirmed long-term portfolio income sustainability.
$8,500 in estimated tax savings by strategically utilizing taxable accounts for the roof repair and optimizing IRA withdrawals, ensuring Eleanor’s long-term financial security.
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