Good Deals
Roth Conversion Ladder

The 11-year tax window most retirees miss.

Between retirement and your first RMD, you can convert Traditional IRA → Roth at rates the IRS will never offer you again.

If you have $500K+ in Traditional IRA / 401(k) balances and you retire before age 73, you enter a brief low-bracket "window" where converting some of that pre-tax money to Roth costs less in tax than the RMDs that come later. The lifetime tax savings for a typical pre-retiree: $100,000 to $500,000+. This calculator shows you yours.

Conversion ladder calculator

Input your situation. We'll project two scenarios: do-nothing vs converting strategically during the retirement-to-73 window.

Combined across all pre-tax retirement accounts. Roth balances don't count here — those are already taxed.
$
yrs
When wage income largely ends. The "window" opens here and closes at age 73 (RMD start under SECURE 2.0).
yrs
While still working. Used to decide if Roth makes sense at all.
%
Low-wage years. Most pre-retirees with $1-3M balances land 12-22% (federal only). Pulling Social Security after 67 may push you toward 22-24%.
%
Once RMDs start, taxable income jumps. Most retirees with $2M+ Traditional balances land 24-32%+. Plus IRMAA Medicare surcharges + state tax.
%
Long-run portfolio return assumption. For conservative income: 5-6%. Moderate: 6-7%. Growth: 7-9%.
%
Source: Cornell LII — 26 U.S.C. §408A (Roth IRAs) · IRS — Required Minimum Distributions (SECURE 2.0) · SECURE Act 2.0 (RMD age moves to 73)

Get your full Pre-Retiree Tax Playbook

Roth Conversion is move #1. The full playbook covers: RMD projection, IRMAA cliffs, Social Security claiming, asset location, drawdown sequencing, and beneficiary audits. We email the PDF.

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Run this against your actual numbers

The Roth Conversion Ladder is one of 8-12 moves that compound for pre-retirees. A 15-min Discovery Call covers your specific window, projected RMDs, IRMAA exposure, and Social Security claiming. Free. No pitch.

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What the Roth Conversion Ladder actually is

Most pre-retirees have a substantial Traditional IRA / 401(k) balance — $500K, $1M, $2M, sometimes $5M+ — that has compounded tax-deferred over a career. The IRS lets you defer taxes during accumulation. But starting at age 73 (under SECURE Act 2.0), it forces you to take Required Minimum Distributions and pay tax on them at your then-current bracket. For households with large balances, RMDs alone push retirement income into the 24-32%+ bracket — plus IRMAA Medicare surcharges, plus state tax.

The ladder strategy: Use the years between retirement and RMD start at 73 to systematically convert Traditional balances to Roth. During this window, your wage income is low (or zero) and your marginal bracket is much lower than what you'll face under forced RMDs. Pay 12-22% now to avoid 24-37% later.

Why the window exists

Typical math: $2M Traditional IRA, retire at 62, RMD start 73 = 11-year window. Convert $100K/year × 11 = $1.1M converted. Tax cost at 22% during window: $242K. Tax saved on the never-RMD'd $1.1M at 32% later: $352K. Net lifetime savings: $110K+ tax + tax-free Roth growth + no RMDs ever + larger inheritance for heirs.

What makes it hard to do right

  • Bracket-filling, not all-at-once. Convert only enough each year to fill the 12% or 22% bracket without spilling into 24%. Requires annual planning + projected income modeling.
  • IRMAA traps. Conversions count toward MAGI for the IRMAA 2-year lookback. A $1 conversion over a tier can cost $2,500/yr in extra Medicare premiums.
  • Capital-gains stacking. Conversion income pushes your ordinary income up, which can push LTCG out of the 0% bracket into 15% — a hidden cost.
  • Social Security taxation interactions. Higher AGI can push 85% of SS into taxable.
  • State-tax considerations. Moving from a high-tax state (CA, NY, NJ) to a no-tax state (TX, FL, WA, TN, NV) before converting saves you 10%+ on every dollar.
  • The 5-year clock. Each conversion year starts its own 5-year hold period for penalty-free principal access. Plan around it.

Common questions

How much should I convert each year?

Generally: enough to fill the next bracket without pushing into a much higher one. For most MFJ households retiring early: $80-120K/yr fills the 22% bracket (2026: 22% applies $94K-$201K). Higher net worth or larger IRA balances may justify filling 24% bracket too ($201K-$384K MFJ for 2026). The calculator above gives a rough planning number; final amount comes from your CPA's projection model.

I'm already 73. Can I still do this?

Mostly no — RMDs are mandatory and can't be converted. But: you can still do incremental conversions of Traditional balances OVER the RMD, if it makes bracket sense. Also: a Qualified Charitable Distribution (QCD) of up to $108,000 (2026) from your IRA can satisfy your RMD tax-free, freeing the rest of your IRA balance for conversion later. More nuanced. Talk to a CFA + CPA.

What about IRMAA?

IRMAA (Medicare premium surcharges) phases in based on MAGI from 2 years prior. Conversions count. A $1 increase over a tier line costs $700-$2,500/yr in Part B/D surcharges. Model the IRMAA tiers + cap conversions just below each cliff. See the IRMAA Cliff calculator for the specific numbers.

What if my heirs inherit the IRA — does Roth still win?

Heavy yes. Non-spouse heirs of a Traditional IRA must drain the entire balance within 10 years (SECURE Act) — which often happens during their peak earning years at 32-37% federal bracket. Inherited Roth IRAs follow the same 10-year rule but distributions are tax-free. For high-net-worth households, the legacy math alone often justifies aggressive conversion.

What's the order of withdrawals after conversion?

General rule for retirees:
1. Taxable brokerage first (already taxed; harvest losses)
2. Traditional 401(k)/IRA next (forced RMDs anyway; bracket-fill)
3. Roth IRA last (let tax-free growth compound longest)
Exceptions: large taxable basis vs gain mix changes Step 1; surviving spouse rules; estate intent. Personalized via the Foundation Review.

Should I do this if I plan to keep working part-time?

Maybe a smaller ladder. The key is bracket — if your part-time income keeps you in 22-24%, you can still convert intelligently. If your part-time income pushes you into 32%+, the window doesn't open until you stop. Run the numbers carefully; the IRMAA + capital-gains interactions tighten.

What about state tax?

Major factor. CA/NY/NJ add 9-13% to every dollar converted. TX/FL/WA/TN/NV/SD/NH/WY add zero. Established residents in high-tax states who plan to relocate should consider doing the entire ladder AFTER the move — often saves 100K+ on a $2M conversion. Talk to a tax professional about residency rules to avoid dual-state-tax exposure.

Get this run for your specific numbers

The Foundation Review covers Roth Conversion + IRMAA + RMD + Social Security claiming + asset location + state-tax-aware sequencing, all against your specific balances and timeline. 90 minutes with Andrew + written report.

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About Good Deals

Good Deals is the planning workbook + advisory practice of Andrew Escher, CFA Charterholder + Investment Adviser Representative based in Austin, TX. Independent stack: Altruist for investment custody, BackNine for insurance placement, Good Deals for the planning layer that ties them together. We work with pre-retirees, HNW executives, and business owners who want structural tax + retirement planning — without the typical AUM-fee pitch.