Insurance Settlement Windfall
DW was injured a few years ago and we are about to get small settlement.
She w*rks [school teacher], and will continue to do so another couple of years. In anticipation of my ER a few years back, we moved her entire 403B balance into Vanguard rollover IRA, and she stopped contributions.
So, with the upcoming settlement, I was wondering: should we park that settlement in a liquid account, and start a deductible IRA? We'd use the settlement funds to supplement that deduction for our cashflow.
We'll get the benefit of a short term tax break without seeing any cashflow shortfall. As I see it, it's not a huge difference but it's money in our pocket.
Am I missing anything, or conversely is it not worth the effort?