Roth conversions — the window before RMDs

The idea in one paragraph

Money in a 401(k) or traditional IRA is taxed when it comes out — and at 73, RMDs start forcing it out whether you need it or not. Someone who retires at 62 often spends a decade in a low tax bracket, then gets pushed into a much higher one when RMDs stack on top of Social Security. A Roth conversion moves money from the 401(k)/IRA into a Roth now, on purpose, paying tax at today's rate you chose instead of tomorrow's rate you didn't. The classic strategy is to "fill a bracket": convert just enough each year to use up, say, the 12% bracket, and stop.

Where to find it

On the Forecast tab, under Stress-test your plan, choose Roth conversions. It's a premium feature, and it needs three things (the panel offers one-click fixes if any is missing):

• Tax modeling turned on — without it there's no tax to save
• A 401(k) or traditional IRA with money in it
• A Roth IRA account for conversions to land in (a zero balance is fine)

How to read the comparison

Each row simulates your entire plan with one strategy: convert nothing, or fill the 10%, 12%, 22%, or 24% bracket every year until RMDs begin. For each you see the total converted, lifetime tax paid, and the plan's ending value.

Rows are compared on after-tax ending value: money still sitting in a 401(k) at the end is counted net of the tax it still owes, because a Roth dollar is fully yours and a 401(k) dollar isn't. The best row gets a best for you tag.

Notice that more conversion isn't automatically better — tax paid early loses decades of growth. There's usually a sweet spot, and it's often a middle bracket.

What's priced into the ranking

This comparison includes two costs that simple bracket math misses:

• Medicare IRMAA surcharges. Above certain incomes, Medicare charges more per month — in cliffs, where one extra dollar buys the whole surcharge tier. Conversions after 65 that cross a cliff pay for it here.
• ACA subsidy loss (if enabled). Before 65, conversion income counts toward your marketplace subsidy — and past 400% of the poverty level the subsidy vanishes entirely. If you're on marketplace insurance, turn on ACA modeling before trusting this ranking; without it, a conversion can look cheaper than it really is.

Honest limits

The comparison assumes today's tax law continues, conversions happen at year-end after any RMD, and heirs or your future self would pay about 22% on whatever stays in the 401(k). It doesn't know your state's rules for conversions or whether you'd pay the conversion tax from a taxable account (slightly better in practice). It's an educational comparison to discuss with a tax professional — not advice.