no answers unfortunately....just some homework
1) what is your marginal tax bracket now/in retirement
2) what is your basis in this? insurance co. can tell you and you can compare w/ your own estimate of what you have put in in premiums and added cash......kind of feels like about half of cash balance would be taxable?
3) what APY is your cash balance earning? some of these things can be earning 4-5% these days which is hard to match
4) for 1-2 yrs, you will be spending 900-1800 more; so need to compare how much you will pay in taxes now vs later, perhaps in a lower bracket or not;
vs. how much more you might earn at presumably much higher rates than outside;
my impression (check w/ insurance co. to see what they say) is that you will be taxed at ordinary income rates for cash value in excess of basis. If getting the chunk all at once puts you in a higher bracket (even in retirement), is taking it in smaller pieces an option?