House Affordability Analysis — Martin & Linda (2026)
=====================================================
Generated: 2026-05-11
Case: Case_m+l.toml (beneficiary fractions set to 1.0 for final bequest)
Portfolio: $7.95M  |  Plan horizon: 29 years  |  Base spending: $216k/yr

Assumptions
-----------
  Primary home appreciation : 3.3%/yr nominal (inflation only, conservative)
  Carrying cost             : 2%/yr of house value (property tax + maintenance)
  Commission at sale        : 6%
  Heir tax on RE            : 0% (step-up in basis at death)
  Heir tax on tax-deferred  : 33% (already embedded in portfolio bequest figures)
  Cash floor                : $1.5M in today's dollars (longevity + LTC backup)

ONE HOME  (primary residence, 3.3% nominal appreciation)
---------------------------------------------------------
 House ($M)   Cash reserve ($M)   House bequest ($M)   Total estate ($M)   Spending/yr      Status
      0.00            4.56                0.00                4.56              198k    OK  (cash >= $1.5M)
      0.50            4.17                0.54                4.71              207k    OK  (cash >= $1.5M)
      1.00            3.78                1.08                4.86              216k    OK  (cash >= $1.5M)
      1.50            3.39                1.62                5.01              226k    OK  (cash >= $1.5M)
      2.00            3.00                2.16                5.16              235k    OK  (cash >= $1.5M)
      2.50            2.60                2.71                5.31              244k    OK  (cash >= $1.5M)
      3.00            2.21                3.25                5.46              253k    OK  (cash >= $1.5M)
      3.25            2.02                3.52                5.53              258k    OK  (cash >= $1.5M)
      3.50            1.83                3.79                5.61              262k    OK  (cash >= $1.5M)
      3.60            1.74                3.90                5.63              264k    OK  (cash >= $1.5M)
      3.70            1.67                4.00                5.67              266k    OK  (cash >= $1.5M)
      3.80            1.59                4.11                5.70              268k    OK  (cash >= $1.5M)
      3.90            1.51                4.22                5.73              270k    OK  (cash >= $1.5M)  <-- last OK
      4.00            1.43                4.33                5.76              271k    ** cash < $1.5M **
      4.50            1.04                4.87                5.91              281k    ** cash < $1.5M **
      5.00            0.65                5.41                6.06              290k    ** cash < $1.5M **
      5.50            0.26                5.95                6.21              299k    ** cash < $1.5M **
      6.00+        INFEASIBLE

Key findings
------------
  * Maximum house price keeping $1.5M cash reserve : ~$3.9M
  * At $3.9M house: cash=$1.51M, house bequest=$4.22M, total estate=$5.73M
  * Spending at $3.9M house: $270k/yr base  ($192k non-housing after $78k carrying costs)
  * Conservative choice ($3.5M): cash=$1.83M, $192k non-housing after $70k carrying costs
  * No bequest sweet spot: RE always beats portfolio (step-up basis vs 33% heir tax drag)
  * Feasibility ceiling: ~$5.5M (larger leaves portfolio too thin to fund 29 years of spending)

Notes
-----
  All dollar amounts in today's (2026) dollars.
  "Cash reserve" = portfolio bequest after taxes (Roth/taxable at full; tax-deferred at 67%).
  "Spending/yr" = base spending level before smile-profile scaling; excludes carrying costs.
  Solver: HiGHS via Owl LP optimizer with Medicare/ACA/LTCG/SS taxability in SC loop.
