Roth Ira Conversion Ladder Calculator

This calculator that will help you to compare the estimated consequences of keeping your traditional ira as is versus converting your traditional ira to a roth ira.

Roth ira conversion ladder calculator. You pay tax at the time of conversion from 401k to roth. This convert ira to roth calculator estimates the change in total net worth at. Traditional ira to roth conversion calculator. When planning for retirement there are a number of key decisions to make.

One big decision is whether or not you should convert your traditional ira into a roth ira. Ira to roth conversion calculator. For instance if you expect your income level to be lower in a particular year but increase again in later years you can initiate a roth conversion to capitalize on the lower income tax year and then let that money grow tax free in your roth ira account. The roth ira conversion is a pretty obscure concept if you aren t changing jobs or planning to retire early.

Roth ira conversion ladder calculator. Everyone should learn about the roth ira conversion ladder even if you are not quite ready to retire yet. Nonetheless it is a rare gift from the irs. I created this calculator to help me in better determining the flow of my roth ira conversion ladder i have planned.

If you have a non roth ira or a 401 k somewhere other than schwab you have two options. Withdraw the money from the roth at least five years later tax and penalty free. It ended up being pretty helpful so i thought i would share. The conversion would be part of a 2 step process often referred to as a backdoor strategy.

This calculator assumes you will keep your roth ira for at least 5 years and you won t withdraw any funds until age 59 1. I put some sample data in but all you need to do is adjust the cells in green. Once the transfer is complete you can initiate the conversion to a roth ira. A conversion has advantages and disadvantages that should be carefully considered before a decision is made.

This calculator can show you the consequences of such a decision. Some people utilizing this strategy will do something called a roth ira conversion ladder where they convert a portion of their traditional ira to a roth ira each year over a number of years. Convert your non roth ira or your 401 k to a roth ira while it is still being held at the other institution. But there still needs to be a large enough amount of retirement savings so that you can continue in retirement for the rest of your life.

Transfer your non roth ira or your 401 k to an ira at schwab. First place your contribution in a traditional ira which has no income limits. Move the money to a roth ira and put it into some investments. Then move the money into a roth ira using a roth conversion.

Converting to a roth ira may ultimately help you save money on income taxes.