Fun with Retirement
Roth Conversion Instrument
Lifetime after-tax wealth delta
+$65,570
Converting $120,000 over 5 years outperforms holding pre-tax across a 27-year horizon at 5.5% assumed return.
Scenarios
Convert$5,752,600
Hold$5,687,030
Lifetime tax saved+$23,581
Conversion amount
$120,000Federal tax this year
$4,233
Bracket 12% · the conversion itself costs 20.9% of converted dollars, federal + state. State adds $790.
Social Security taxation
65%
Of benefits are taxable at this level of provisional income.
IRMAA bracket proximity
$143.1K left
Room before the next cliff at $218,000. Surcharge from this year's income: $0/yr, billed two years later.
First projected RMD
$55,823
Down from $61,156 under the hold scenario — 9% lower required draw.
Year-by-year projection
Conversion scenario| Year | Age | Converted | Pre-tax bal. | Roth bal. | RMD | Tax |
|---|---|---|---|---|---|---|
| 1970 | 68 | $24,000 | $1,282,880 | $354,480 | — | $5,023 |
| 1971 | 69 | $24,000 | $1,328,118 | $399,296 | — | $5,023 |
| 1972 | 70 | $24,000 | $1,375,845 | $446,578 | — | $5,023 |
| 1973 | 71 | $24,000 | $1,426,196 | $496,459 | — | $5,023 |
| 1974 | 72 | $24,000 | $1,479,317 | $549,085 | — | $5,023 |
| 1975 | 73 | — | $1,501,786 | $579,284 | $55,823 | $11,406 |
| 1976 | 74 | — | $1,522,252 | $611,145 | $58,894 | $11,928 |
| 1977 | 75 | — | $1,540,692 | $644,758 | $61,880 | $12,436 |
| 1978 | 76 | — | $1,556,846 | $680,220 | $65,008 | $12,968 |
| 1979 | 77 | — | $1,570,749 | $717,632 | $67,985 | $13,474 |
| 1980 | 78 | — | $1,581,816 | $757,102 | $71,398 | $14,054 |
| 1981 | 79 | — | $1,589,725 | $798,742 | $74,968 | $14,661 |
Illustrative projection only. Assumes 5.5% nominal return, no new contributions, conversion taxes paid from the taxable account, and 2026 federal parameters held flat (senior deduction ends after 2028). Pre-tax money left at the end is valued after tax at the heirs' rate you enter (22%). Not tax, legal or investment advice.