Roth Conversion Ladder Calculator β FIRE Strategy
Plan your Roth conversion ladder for early retirement. Year-by-year conversion schedule, 5-year accessibility timeline, tax on each conversion, and total tax saved vs staying Traditional.
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Target annual conversion = living expenses Must be under 59Β½ for ladder to apply
Investment return on IRA balance
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Must cover 5 years of expenses ($300K for $60K/yr) $0
Annual Conversion Amount
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Tax on Annual Conversion
Checking...
Bridge Fund Sufficiency
0%
Effective Conversion Tax Rate
First 10-Year Conversion Schedule
| Year | Age | IRA Balance (start) | Conversion | Tax Owed | Accessible From Roth | Fund Source |
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How the Roth Conversion Ladder Works
Early retirees who have most of their wealth in Traditional IRAs or 401(k)s face a problem: withdrawals before 59Β½ incur a 10% penalty. The Roth conversion ladder solves this by systematically converting funds each year, then waiting 5 years before accessing them penalty-free.
Ladder Mechanics
Year 0 (retire): Start converting Traditional IRA β Roth (= annual expenses)
Years 1β5: Live on taxable brokerage accounts (bridge fund)
Year 5: First conversion (from Year 0) now accessible penalty-free
Year 6: Second conversion accessible, and so on
Each conversion taxed as ordinary income in the year of conversion
Years 1β5: Live on taxable brokerage accounts (bridge fund)
Year 5: First conversion (from Year 0) now accessible penalty-free
Year 6: Second conversion accessible, and so on
Each conversion taxed as ordinary income in the year of conversion
Tax Advantage Formula
Conversion tax: Amount Γ marginal rate in low-income retirement year
Alternative (RMDs at 72+): Amount Γ marginal rate with SS + RMDs stacked
Savings = (future high rate β current low rate) Γ converted amount
Alternative (RMDs at 72+): Amount Γ marginal rate with SS + RMDs stacked
Savings = (future high rate β current low rate) Γ converted amount
Extended
20-Year Projection β Roth Ladder vs Staying Traditional
Full year-by-year projection with total tax paid, account balances, and total tax saved
20-year projection comparing Roth Ladder strategy (convert annually at low rates) vs staying all-Traditional (withdraw later at higher rates with RMDs).
Likely higher once Social Security + RMDs combine
| Year | Age | Conversion | Tax (Ladder) | Trad IRA Balance | Roth Balance | Cumulative Tax Saved |
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Frequently Asked Questions
What is a Roth conversion ladder and why is it used in FIRE?
A Roth conversion ladder is a strategy used by early retirees who need to access retirement funds before age 59Β½ without paying the 10% early withdrawal penalty. Each year, you convert a portion of your Traditional IRA to a Roth IRA. After 5 years (the per-conversion waiting period), that converted amount can be withdrawn penalty-free. Meanwhile, you live on taxable accounts during the 5-year bridge period. This allows you to access your Traditional IRA money tax-efficiently without penalties.
How does the 5-year rule apply to Roth conversions?
Each Roth conversion has its own independent 5-year waiting period. A conversion made on January 1, 2026 (tax year 2026) becomes penalty-free on January 1, 2030 (the beginning of the 6th tax year). This is separate from the Roth IRA "first contribution" 5-year rule for earnings. Even if you have had a Roth IRA for many years, each new conversion amount must age for 5 years before it can be withdrawn penalty-free if you are under 59Β½. The principal of conversions can be withdrawn first, before earnings.
What income does the Roth conversion count as?
Each Traditional IRA to Roth conversion is treated as ordinary taxable income in the year of conversion. The converted amount is added to your other income for the year and taxed at your marginal federal rate (plus any applicable state tax). The key advantage in FIRE is that in early retirement with low income, you may be in the 0%, 10%, or 12% bracket β converting at these low rates saves substantial tax compared to converting at 22%+ while employed. Strategic conversion fills up low brackets each year.
How much should I convert each year?
The optimal annual conversion amount is the amount that fills your current tax bracket without pushing into a higher one. Common targets: fill up to the top of the 12% bracket (up to $48,475 single / $96,950 MFJ in 2026 minus standard deduction) or the 22% bracket. You also want to avoid triggering Medicare premium surcharges (IRMAA), which start at $106,000 MAGI for single filers. The calculator shows filling up to living expenses as a baseline β in practice, convert up to your desired bracket ceiling.
What happens if I run out of taxable account money before the 5 years are up?
The 5-year bridge period is a critical planning element. You need sufficient taxable (non-IRA) money to cover 5 years of living expenses before starting the ladder. This is typically a mix of: brokerage accounts, after-tax savings, early Roth contributions (your principal, not earnings, can always be withdrawn penalty-free from a Roth regardless of age), and Roth conversion amounts from year 1 and 2 (once they hit 5 years). Some FIRE practitioners also use the 72(t) SEPP rule for additional penalty-free IRA access if needed.