# Eric and Jana Tanner Updated Strategy
## Cover
**Eric & Jana Tanner**
**Your Updated Strategy Brief**
April 29, 2026
Prepared by Scotty Liberatore, Legacy & Financial Specialist
## Plan Overview
Your Plan, Revisited & Refined
| | | |
| --- | --- | --- |
| :icon-wallet: | 2026 Total Income | $113K |
| :icon-target: | Retirement Target/yr | $84K |
| :icon-building-2: | Total Household Assets | $2.3M |
| :icon-landmark: | Pre-Tax IRA Exposure | $928K |
## Income Capacity
:icon-trending-up:
Question 1
Maximum Income Capacity
Your original plan was built around a conservative **$84,000/year ($7,000/month)** baseline. The portfolio alone can comfortably produce **$60,000+/year** without touching the $442K annuity or insurance cash values.
When layering Social Security with portfolio withdrawals, your realistic sustainable income range is **$94,000–$110,000/year**. This fully funds the $50K home improvement project and travel, preserving assets through age 90–95.
The key constraint is taxes: pulling more income means more taxable events. Mike is modeling the upper threshold precisely.
| | |
| --- | --- |
| Original Baseline | $84,000 /yr |
| Portfolio Capacity | $60,000+ /yr |
| Sustainable Range | $94K - $110K /yr |
## Roth Strategy
Question 2
Why use existing Roth funds for conversions?
Your instinct is right—the ideal scenario is to always pay conversion taxes with outside (brokerage) dollars. However, your liquid brokerage assets (~$150,000) are meaningful but not unlimited.
Over an 8–10 year window, moving $928,252 to Roth while staying in the 22% bracket requires ~$15K–$20K per year in taxes. Once the brokerage pool is exhausted, the only available funds are Roth IRA dollars or pausing conversions.
The Strategic Tradeoff
Using some Roth dollars today to fund the "heavy lift" of converting $500K–$700K of pre-tax IRA funds is mathematically favorable. Those converted dollars grow tax-free forever and eliminate future RMD exposure on the full $928K balance.
## Annuity Role
Question 3
The $442K Annuity
The American Life Insurance NY annuity sits in the **“tax-deferred”** bucket and plays a deliberate supporting role in the sequencing strategy:
| | | |
| --- | --- | --- |
| :icon-lock: | Phase 1 (Ages 64–70) | Leave the annuity untouched. Let it grow without triggering a taxable income event. Income comes from consulting, brokerage, and Roth withdrawals. |
| :icon-unlock: | Phase 2 (Age 70+) | Once Social Security is maximized and Roth conversion activity slows, annuity income can be layered in strategically in a year when other income sources are lower. |
## 2026 Income
The Full Picture
Your 2026 Income
Income Source
Estimated Total: ~$113,000
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| :icon-briefcase: | Trail Life USA Salary | ~$70,000 | Ordinary income (W-2) | Confirmed | No |
| :icon-file-text: | Inherited IRA (Mother-in-Law) | ~$23,000–$24,000 | Ordinary income (required) | Active | No |
| :icon-alert-circle: | American Life Penalty-Free | ~$19,000 | Ordinary income (gain portion) | ⚠ Time Sensitive | Yes |
The Action Item
At ~$113K total income, you remain in the 22% bracket. However, this leaves **limited room for additional Roth conversions this year**.
The **$19,000 penalty-free withdrawal** must be coordinated before the November 10 anniversary date.
## Roth Roadmap
Roth Conversion Roadmap
2026 – 2033
| | | | |
| --- | --- | --- | --- |
| 2026 | Age 64 | 15% | ~$15K limited by $113K income |
| 2027–28 | Age 65–66 | 60% | Prime window — $40–60K/yr (salary ends, SS not yet claimed) |
| 2029–31 | Age 67–69 | 45% | Sustained pace — lower income floor, bracket still favorable |
| 2032–33 | Age 70–71 | 30% | Final push before SS + RMDs compress available bracket space |
## Drawdown Order
Which Bucket, When
The Draw-Down Order
| | | |
| --- | --- | --- |
| Part-Time Consulting Income | $20K–$35K/yr bridge income — preserves portfolio, extends Roth window | Bridge |
| Roth IRA Withdrawals | Eric’s Roth ($136K) — zero tax, no RMD requirement, maximum flexibility | Tax-Free |
| Taxable Brokerage / Liquid | PGIM ($37K), money market, CDs — capital gains treatment, low-tax | Low-Tax |
| Traditional / Rollover IRA | Coordinated with SS timing — avoid stacking IRA distributions on top of SS | Taxable |
| Social Security | Delayed to Age 67–70. Each year past 62 adds ~8% to maximize lifetime income | Maximize |
| Annuity Income ($442K) | Activate in a lower-income year to minimize bracket impact; hold until SS settles | Ordinary Income |
## Life Insurance
Life Insurance Conversion
Scotty’s Focus Area
| | | | | |
| --- | --- | --- | --- | --- |
| :icon-shield: | Eric’s Variable Life | $40 / month | Subject to market risk. No LTC benefit. | Convert to single-premium LTC hybrid policy (no ongoing premiums) |
| :icon-shield: | Jana’s Variable Life | $35 / month | Subject to market risk. No LTC benefit. | Convert to single-premium LTC hybrid policy (no ongoing premiums) |
| :icon-briefcase: | Allianz UL Policy | Ongoing Premiums | Currently funding death benefit. | Reduce death benefit to eliminate premiums, freeing up cash flow for Roth conversion taxes. |
## Long-Term Care Gap
Long-Term Care
Jana’s Gap
Jana currently has **no identified long-term care coverage**. This is a priority item.
A single LTC event can cost $100,000–$150,000+ per year for skilled nursing care in Ohio.
The Proposed Solution
Convert the existing variable life policies into **single-premium hybrid life/LTC policies**.
Scotty is actively researching single-premium solutions and will present specific options at your next meeting, including projected LTC benefit amounts and conversion terms.
| | |
| --- | --- |
| :icon-x-circle: | Eliminates ongoing monthly premiums ($40 + $35/mo) |
| :icon-shield: | Removes market risk exposure from both policies |
| :icon-heart: | Adds meaningful LTC benefits for Jana—without ongoing payments |
## Action Checklist
Action Checklist
What Happens Next
| | | |
| --- | --- | --- |
| Max Income Threshold Analysis | Model exact upper limit and optimal Roth conversion pace for 2026–2031, incorporating $113K 2026 income. | Mike |
| American Life Withdrawal | Coordinate $19K penalty-free withdrawal before Nov 10 anniversary; integrate into tax picture. | Scotty |
| Inherited IRA Plan | Confirm RMDs from mother-in-law's Schwab IRAs; incorporate into 2026 bracket modeling. | Mike |
| Single-Premium LTC Solutions | Present options to convert variable life policies into hybrid LTC policies with no ongoing premiums. | Scotty |
| Allianz UL Review | Evaluate reducing face value to eliminate premiums and free up cash flow for tax funding. | Scotty |
| Annuity Audit | Review fees, surrender schedule, and riders to determine optimal income activation timing. | Mike + Scotty |
| Estate Documents | Will, POA, and Healthcare Directive not yet on file; priority before finalizing engagement. | Mike + Eric/Jana |
| In-Person Meeting | Schedule face-to-face in Ohio (flexible on weekends) to present refined strategy in person. | Scotty |
## Our Team
Built For Continuity
Your Dedicated Team
**Scotty Liberatore**** **is your primary point of contact for legacy, insurance, and LTC decisions. **Mike Milligan, CFP®**** **leads the taxes, retirement, and investment strategies. Our dedicated customer service team handles administrative items within 24–48 hours. You will have a team that reaches out directly to you both, time and time again — **not the other way around.**
**Mike Milligan, CFP**®** **and the whole** ****1.oak Financial Team** is structured so no single advisor is a single point of failure. Scotty, plus our four amazing and trusted financial advisors that holds retirement, investments, and taxes across six states, ensure the **1.OAK Plan** outlives any individual. You are not betting on one person — **you are working with the full roster of amazing professionals.**
A One of a kind Financial Plan, for Your One of a Kind Life
**www.1oakfinancial.com**
## Stay Connected
Thank You for the Support
A One of a Kind Financial Plan,
For your One of a Kind Life!
Stay Connected
Connect with Mike Milligan, CFP® on LinkedIn
www.linkedin.com/in/mikemilligancfp
**Mike Milligan, CFP®** | Entrepreneur, Travel Enthusiast, Mentor, Author & Founder of **1.oak Financial**, Norfolk VA
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