Roth Conversion with Distributions

Roth Conversion While Taking Distributions

Compare converting a Traditional IRA to Roth while simultaneously drawing distributions — useful in early retirement or during a low-income year.

Inputs

Traditional IRA balance ($)

Annual conversion amount ($)

Annual distribution (spending) ($)

Current marginal tax rate (%)

Retirement marginal tax rate (%)

Expected annual return (%)

Years of strategy

Results

With conversion — net after-tax

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Without conversion — net after-tax

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Conversion advantage

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Total conversion taxes paid

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Roth balance at end

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Converting during low-tax years locks in today's rate while future growth is tax-free. Conversion taxes are paid from outside funds (assumed here). Roth conversions have a 5-year rule on withdrawal of converted principal.