A Roth conversion ladder converts funds from a traditional IRA or 401(k) to a Roth IRA annually during low-income years, paying taxes now at lower rates to avoid large taxable Required Minimum Distributions later. This simulator projects your three-account strategy over decades, showing how much you save in lifetime taxes by converting systematically versus waiting for RMDs.
Your Retirement Account Parameters
5-Year Rule: Conversions starting at age - become penalty-free at age -. Build a 5-year runway before you need the funds.
Account Balances: Ladder Strategy vs No Conversions
Year-by-Year Projection
| Year / Age | Conversion | Tax on Conv. | Traditional | Roth |
|---|
How to Use the Roth Conversion Ladder Simulator
A Roth conversion ladder is one of the most powerful long-term tax strategies available to early retirees and high savers. The idea is simple: instead of letting a large traditional IRA grow until age 73 when RMDs force taxable withdrawals, you convert small annual tranches to Roth during low-income years, paying taxes at lower brackets. The simulator shows you exactly how much this strategy saves over your lifetime.
Step 1: Enter Your Current Account Balances
Enter your traditional IRA/401(k) balance, existing Roth IRA balance, and taxable brokerage account. The brokerage account funds living expenses during the early years when your Roth conversions are still in the 5-year seasoning period. A common early retirement setup is $500K traditional, $50K Roth, $200K brokerage — the brokerage covers 4 years of expenses ($50K/year) while the Roth conversion pipeline builds.
Step 2: Set Annual Conversion Amount
The optimal conversion amount fills up lower tax brackets without spilling into higher ones. In 2026, the 12% bracket tops out at $48,475 (single) or $96,950 (MFJ). If your other income is $0, converting up to those thresholds (minus standard deduction) keeps you in the 12% bracket. Try the slider to see how different annual conversion amounts affect lifetime tax savings — you may find diminishing returns above a certain level.
Step 3: Understand the 5-Year Seasoning Rule
Each year's Roth conversion starts its own 5-year clock. Conversions made at age 50 can be withdrawn penalty-free at age 55. This is why starting conversions early matters: you build a "ladder" where each year's conversions mature in sequence. By age 59½, the penalty restriction no longer applies, and at 65+ you can withdraw for any medical reason tax-free via HSA reimbursement. The simulator shows your projected seasoning timeline.
Step 4: Compare Lifetime Tax With and Without Conversions
The "Lifetime Tax Savings" stat at the top shows the total tax difference between systematically converting versus waiting for RMDs. For most people with substantial traditional accounts ($500K–$2M), the savings are significant — often $100,000 to $500,000 in lifetime taxes. The no-ladder scenario shows what happens when a large traditional IRA forces RMDs starting at 73, potentially pushing you into the 22%–32% bracket each year in retirement.
FAQ
What is a Roth conversion ladder?
A Roth conversion ladder is a strategy of systematically converting traditional IRA or 401(k) funds to a Roth IRA over many years, typically during a low-income period (early retirement, career gap, or retirement). By converting in small annual tranches, you fill up lower tax brackets each year rather than being forced to take large taxable Required Minimum Distributions (RMDs) at age 73. After a 5-year seasoning period, converted funds can be withdrawn penalty-free.
What is the 5-year rule for Roth conversions?
Each Roth conversion starts its own 5-year clock before the converted principal can be withdrawn penalty-free (before age 59½). The earnings on conversions follow a separate 5-year rule from the account opening date. This is why a Roth conversion ladder works best when started at least 5 years before you need the converted funds — start conversions at age 55 to access them at 60 without penalty.
How much should I convert each year?
The optimal annual conversion amount fills up your current tax bracket without spilling into the next one. If you're in the 12% bracket (up to ~$48,475 single / ~$96,950 MFJ in 2026), convert just enough to reach the 22% bracket threshold. For most early retirees living on $40,000–$60,000 annually, converting $20,000–$40,000/year in 12% bracket territory can save hundreds of thousands over a lifetime versus waiting for RMDs.
What happens if I don't do Roth conversions?
Without conversions, traditional IRA/401(k) balances continue growing tax-deferred until age 73, when Required Minimum Distributions force large taxable withdrawals. A $2M traditional IRA at 73 requires an RMD of roughly $77,000 in year one, potentially pushing you into higher brackets and triggering Medicare IRMAA surcharges. Roth conversions spread that tax bill across many years at lower rates.
Is this Roth conversion ladder simulator free?
Yes, completely free with no account required. All projections run locally in your browser. Your retirement account balances and income data are never sent to any server.
Does this tool account for Required Minimum Distributions?
The no-ladder scenario models RMDs starting at age 73 using IRS Uniform Lifetime Table factors (starting at approximately 3.77% of balance at age 73, increasing each year). This is used to compute the lifetime tax comparison between doing conversions vs waiting for RMDs.
Can I use this for a 72(t) SEPP strategy?
This simulator specifically models the Roth conversion ladder, which is penalty-free starting at age 59½ or after meeting the 5-year rule. For accessing funds before 59½ without penalty, a separate 72(t) SEPP (Substantially Equal Periodic Payments) strategy applies. However, Roth conversion ladders and 72(t) SEPP are often used together in early retirement planning — the ladder provides tax-free growth while 72(t) handles penalty-free access.