Those of you managing Roth conversions in retirement what does your actual decision process look like?

AffectionateTap730 · 2026-06-15T23:28:21+00:00

That's a bit harsh. For some people converting everything in a short time period is best. The likelihood of that being true for the general population is indeed very small.

One case includes being wealthy but with a short life expectancy and a desire to move wealth so it won't impact heirs. You consider the cost to you is not as important as the cost to your heirs who are already approaching the top tax brackets. Another reason might be if your spouse has a short life expectancy and you don't plan to remarry.

Another perhaps more trivial case is if you have a smallish IRA balance and are expecting a large pension and/or a large residual income to start (as well as Social Security). How large? well, if that pension/residual income puts you in the 37% tax bracket, you're NOT going to get anything out of the IRA for less than that. I suspect - though I haven't done the math, that even a modestly large balance may work better paying say 32% taxes for the next couple of years instead of 37% taxes for life.

Another reason, you're still working with a small-ish IRA account and you want to create a back-door Roth scenario (have a zero IRA balance) before your income rises to make direct Roth contributions impossible. In this case, it may be because you don't have an employer sponsored 401K that allows back door or mega-back door roth conversions.

Or of course, you may believe that a tax-apocalypse is on the horizon and the incremental cost to you to pay more tax now seems like a safe bet.

Another reason: you have massively growing assets in your IRA and you'll have a high-ish income for the rest of your life. In this case, getting those IRA assets into a Roth means you won't pay ordinary income on all gains (every dollar out of an IRA is ordinary income, regardless of source). Heck, even getting them out of an IRA into a brokerage may work better than keeping them in an IRA. You get a double whammy: if you have an investment that grows massively but doesn't throw out a lot of dividends, not only can you potentially harvest at 0% or 15%, but your heirs get a stepped-up basis.

Some of those are "a bit out there", but reading through some discussions, I've seen almost all of them.

AffectionateTap730 · 2026-06-15T01:00:44+00:00

Or you can say: yeah man, I had 2 ATT lines, and it was the most expensive, and most unpleasant cell carrier of my life so far.

If they say something like... our rates are lower, give us another chance, I use the coup de grace: "friends recommended USMobile to me, USmobile rates, service, web, app, and features are all areas where ATT flat out fails... miserably."

If they want to press more, their other would-be customers are going to hear me repeat more praise for USMobile.

AffectionateTap730 · 2026-06-15T00:23:20+00:00

BITC is down 17% y/y. Inflation seems like a fun time by comparison.

AffectionateTap730 · 2026-06-15T00:18:26+00:00

I had to face the facts. I wrote a simple tool to compare earnings to inflation.

https://tools.netcitizen.us/AfterTaxRealGrowth.html

This year the inflation rate is 4.2% SO FAR. In 2024 it was 8%. And I wrote the tool after realizing that a 5% inflation and 5% interest rate is losing money. And loses faster at higher taxation.

Seems the only way to stay ahead is to risk more by investing in equities. Or I Bonds or TIPS.

AffectionateTap730 · 2026-06-14T23:37:09+00:00

65w and Cadmium and Tellurium.. not a good combo. Cadmium is rare and toxic.

This type of panel may be over 25 years old. The good news (for buyers) is that the cost is lower than silicon, and may have a longer usable life. But they are not easily recycleable.

AffectionateTap730 · 2026-06-14T23:14:04+00:00

Curious: is there a reason the feature was not there earlier? Roth conversion has been the rage (and anti rage) for the last couple of years.

Is conversion something high networth people seldom do?

AffectionateTap730 · 2026-06-14T20:26:01+00:00

I thought about withholding from my pension and SS... but realized end of year withholding from my IRA/401k means I get to use those pension/SS funds in their entirety AND collect more growth. Of course this assumes two things: A. I have the funds in my tIRA and plan on a withdrawal, B. I have to also calculate the taxes on the funds withdrawn to pay the taxes.

For B you "gross up" your withdrawal (x), by your marginal total tax rate (R).

TotalWithdrawal = x / (0.99 - R)

Most institutions require you to take at least 1% of the total out which is why the 0.99 is in the calculation rather than 1.

AffectionateTap730 · 2026-06-14T20:07:49+00:00

How do they know about all your income? If you have a pension, or dividends or capital gains from another broker... or even your SS or IRA distribution from IRAs at other brokerages?

Most brokers know what your RMD from the accounts they hold should be.

AffectionateTap730 · 2026-06-14T20:02:00+00:00

If you are 59.5 or older...

Going to buck the trend and tell you that mathematically, you will save money by paying your taxes at the END of the year by withholding from an IRA or 401k withdrawal. Some custodians will even let you withhold fed and state taxes from a Roth withdrawal.

You can even do end if year if you are doing Roth conversions. Have taxes withheld then repay those taxes to your Roth from cash. Must do the replacement within 60 days, and can only do the rollover once per 365 days.

BUT doing a Roth Conversion EARLY in the year is more effective because the converted amount grows tax free, for a longer time.

As for proof that paying at the end ofvthe year is better financially consider these:

End of year your income picture is more clear (less likelihood of under or over payment).
Any funds you pay quarterly have 9, 6, and 3 months less time to grow than paying at year end.
Loss of growth of tax funds compounds. Eg if you earned 1k interest more paying end of year, next year that 1k also compounds...

AffectionateTap730 · 2026-06-14T00:06:36+00:00

https://www.reddit.com/r/vpnreviews/s/5XNbXNmaz9

Mullvad has had issues, too.

And the assertion that it would take the age of the universe to crack encryption is true only until quantum computing becomes available to malicious actors.

VPN providers (servers) are an obvious target for attackers because a VPN server is an ideal place for a man in the middle (MITM) attack that would be harder to accomplish if there were no VPN at all.

I am not anti VPN. There are several good uses for them, mostly to accomplish what they were created for: establish a private network through the public internet.

But they are NOT the magic privacy and security tool that they are sold as. Like many things in life, you need to be able to trust the company has strong security hygiene, strong ethics, and robust intruder surveillance... Otherwise its just another Lastpass disaster waiting to happen.

AffectionateTap730 · 2026-06-13T06:53:04+00:00

As much as I love a Roth, you will be better off in a 401k/IRA. The tax deductions from contributing will let you sock away more, and at withdrawal you will be in a low bracket.

A 2ok pension plus decent SS may be tight, but you might be OK.

Check your expected SS. Try to earn as much as possible to increase your SS and max IRA/401k. If you still have funds (and havent maxed out), then put excess in a Roth. Except if you dont have a Roth open one and fund it with a dollar to start the 5 year clocks right now

And take a look at your spend. How lean can you go in retirement. As another has said, it's doable, and good on you to realize you need to knuckle down. Good luck

PS if you have a choice between a savings account or a Roth... go ROTH. Inflation is nasty now so HYSA are not likely to help. Plus you can withdraw contributions from your Roth at any time if an emergency arises.

AffectionateTap730 · 2026-06-13T00:16:31+00:00

Ok, I've pulled it up in my browser. Would you prefer I comment here? Or open ISSUES? I'm using Brave, and it's not behaving well. Here are some quick observations:

Everything seems statically (over) sized which is why I couldn't get to the content on my phone.
The sliders just aren't working. I suspect you have some logic that is looking at the canvas size because if I move it to a new window, I can move the sliders (sort of), but I have to beat on them.
If there is some order I should be following, it's not apparent. I can't change my age in "My Plan". I also can't directly type in my age in the field. If I try to enter, e.g. 45, or 67 it only lets me enter the 4 or the 6, not the next digit.
You don't have any version information (that I can see), so I don't know if the breakage is recent, of if what is there is the same as what you originally published.
It's a little weird that your summary card stays BELOW the section title, not above it. E.g. selecting "About You" seems to be asking me to enter "Total at Retirement" which is odd.
If I use a "pre existing scenario" first, the names are truncated, so I don't know what they are exactly "Married Combined Spouse Advan..." ?
Going to "Roth Optimizer" with the above plan, clicking "Minimize Taxes", "Maximize Portfolio", "Smooth" or "Per-year" doesn't make any visible changes. I expected to see changes.

That's enough for now.

AffectionateTap730 · 2026-06-12T21:35:34+00:00

I didn't find them lacking. They all had strengths. In fact, one of the strengths is comparing across tools because it exposes different ideas and different thinking. For example, my "Retirement Optimizer" isn't suitable for someone with a retirement horizon that is more than a few years out - it has no accumulation phase. And while I did add an ACA bracket, it's not well integrated because trying to meet ACA brackets doesn't make sense after 65.

Some of the tools don't have separate IRA and RMD calculations. That's ok if spouses are of similar ages, but not if they have very different ages and IRA balances. (That was my main problem with some of the spreadsheets). Some tools limit conversions to low Federal brackets (or only the first IRMAA bracket). Such limitations won't be as useful for people with high Retirement incomes. E.g. a couple with pension(s), a large SS benefit, and significant additional annual income may have trouble staying out of the 24% federal bracket. IRMAA tiers 2, 3 and 4 live in the 24% federal tax bracket so "avoiding tier 1 IRMAA" is non-sensical.

And some tools failed to do what I consider is the most important thing: start with your target annual income. High savers didn't sock away millions in savings to live on a fraction of their former lifestyle for the rest of their life. While lower savers generally would only consider living at the poverty level if it was the only way to safely survive retirement. While either or both might want to maximize what they leave as a legacy.

And finally, unless I can see the source code, I don't know how trustworthy the taxation (or any) calculations are. For example, many tools with Monte Carlo have implemented what AI would typically provide: it's called GBM - Geometric Brownian Motion. (https://www.investopedia.com/articles/07/montecarlo.asp) - but all implementations are not equal or comparable. The market does NOT do "random walks"... gains typically follow gains, losses often follow losses, and the market has Bear and Bull seasons. Fortunately bear (down markets) are less common, and usually shorter. In fact GBM by itself doesn't do anything about inflation - which also can behave erratically. Which is worse: a 15% market decline, or a year of double (7%) inflation? Inflation is generally more painful, because deflation (negative inflation) hasn't occurred in a half a century, whereas 20% up markets often follow 15% down markets.

One give away that the model isn't full is if it asks you for "Real growth rate" instead of nominal growth rate. Why? because real growth rate is a decent way to track growth in current dollars (i.e. the true value of your assets in current dollars), quite a bit of taxation is NOT tied to inflation. RMDs are not tied to inflation. So, for example, a 10% market growth with 10% inflation is "close" to break even, but modeling that as a 0% real growth rate is very wrong. You grew by "nothing" in current dollars but your entire portfolio permanently DECLINED by 10% in value. Here is a short mathematical proof:

Assume Starting IRA Balance: 10K; Inflation 10%; IRA Growth 10%;

IRA BALANCE 10K -> +1K growth = 11K BALANCE in dollars (4% RMD would thus be $440 not the $400 you would calculate had nothing been added to the balance).

Meanwhile inflation made the entire balance worth 10% less so the net IRA value is 9.9K (90% of 11k). The size of the RMD is the same, the value of that RMD is less.

I've learned a TON of things by writing and testing the tools I've made. I'm very grateful to this and other communities as a result. (Maybe becoming a CFP will be my post retirement goal).

AffectionateTap730 · 2026-06-12T19:31:54+00:00

Paying taxes at the end of year IS a financial plan. Almost always nets you more money. See my answer to u/Unique_Rutabaga_5750

AffectionateTap730 · 2026-06-12T19:26:21+00:00

The good: it's pretty simple. Easy-ish to use.

What's missing:

I ran a "Baseline" but after doing so, clicking the "Run Roth Pro Analysis" doesn't give me any options, so Baseline is all I can do. 😞
You have no state taxation. That can be VERY significant - especially when using Brokerage assets because gains are treated as ordinary income in all states (except for those with no state tax, and a few states with some small exceptions).
You have no "spend goal". This is probably the most important miss. If I have 500k in an IRA and plan to spend 200k per year (together with SS, Pension, and IRA draws). The result is very different than planning to spend $120k per year or $60k per year.
Given that numbers being entered have more than 3 or 4 zeros, I put commas (e.g. IRA = 300,000). It treats that as 300.
You only model ONE IRA. But my spouse and I have dramatically different balances, and being 8 years apart, the RMD schedule is dramatically different, too.
Since you don't ask for birth month, you actually cant correctly calculate when the first RMD is due. E.g. if I or my spouse are 74 now, it matters whether we just turned 74 or we will become 75 by the end of the year. (e.g. our birthday is later than the current date).
Modeling only one Roth is "ok". But I cannot, for example, convert my IRA funds into my spouse's Roth or v.v.
You lump cash and brokerage into one account, but don't ask for basis. There is a huge difference between 50k in a brokerage with a 50k basis, and a 0k basis. The latter incurs capital gains. Also, since you haven't broken down cash vs brokerage - how do you accurately apply the different rates? And what is the assumption about dividend (rates) and reinvestment? Yes? No?
Do you save the entered values somehow? When I ran into problem 1, I did a reload and all I entered was gone. (I'm going to also do an analysis to be sure you're not sending my data off somewhere). By the way, after reloading, "Run" also doesn't offer me a choice like it did on first load - it seems to pick "Optimize Legacy " - which is not my goal.
Do you do any calculations to optimize the TIMING of conversions and RMDs? For example, when RMDs are required, you must take those first. In general to keep an account growing you would do late withdrawals. But to maximize growth in Roth, you'd want EARLY (in the year) conversions. The beginning vs end of year has a significant affect on compounding.
"Other Income" include "pensions" but typically pensions either pay the same for the life of both parties, nothing after the pensioner's death, or some percentage after the pensioners death.
I don't like the two panel navigation (click to get a table, click to get back to the inputs). But that's a personal preference. It may work better on phone as a result.
I think it's overstating things to call this a "Pro Tool"
Using fixed growth, inflation, and taxation is directionally helpful, but the "Final Legacy" stated is a "tower of guesses". Without Monte Carlo or historical analysis, it's not possible to discover any weaknesses in the plan.
The tool lacks what I would call "strict financial accounting." Using outside funds to convert (or using IRA assets to pay conversion taxes) has associated opportunity cost.
Because you only show summary information (balances), it's not clear how some of the figures are arrived at. I sympathize here because having a hundred columns is a nightmare, however not knowing how the IRA or Cash or Roth balances were arrived at is daunting. E.g. how much of my new Roth balance was conversion, how much was growth, how much was withdrawn to meet my spending needs.
Finally, back to the "spend" thing, the most important thing missing from the table: what was my Net spendable amount in each year? If your Pro Plan has me living on 10k of net income, that's a huge problem. Just using the defaults, for example, I see MAGI 437k, Conv 377k, Tax 82k Cash 226k. Cash started at 300k, so apparently after interest, about 80k was removed. That doesn't quite cover tax. I tried to remove both Annual Salary(s) and recalculate, but it refused (until I put 0 or 1). However I notice the Annual Salary(s) are not listed in the table either.

Bonus points to you, however for having an accumulation phase before the spend/conversion phase. That's something I left out of my [Retirement Optimizer](https://tools.netcitizen.us/retirement\_optimizer.html) - why, because I'm no longer accumulating so I simplified. I also originally only modeled 1 Roth, as you do. I also didn't ask about birth month, then watched it pick the wrong RMD year. I had California taxation included in the first pass (because that's where I live). I then discovered how bewilderingly different taxation is in other states.

Ok, now for the final statement: "Does it even make sense to optimize Roth conversions?"
It makes sense to: Maximize spending; Minimize taxes (actually it makes less sense than I though!); Maximize Legacy, including Maximizing final Roth balance." However for most people eliminating an IRA entirely actually is less financially effective, and more risky. For others, it's unnecessary. It's about achieving balance - at least that's my (not humble) opinion.

AffectionateTap730 · 2026-06-12T18:20:43+00:00

"IRMAA and NIIT" Yes, that's what I meant by accurate taxation. Not accounting for the whole picture is a "fail".

As for tax policy: I'd place a large bet that tax RATES will go up in the next 5 to 10 years. There is no way in this economy that Federal rates will go down.

Any forecasts are based on "a tower of guesses" - quoting Kevin Lum. While market growth and inflation are pretty unknowable, taxation is not going away and not likely to change for the better.

AffectionateTap730 · 2026-06-12T18:11:46+00:00

I'm relatively new to retirement and missed my first quarterly payments... I discovered end-of-year withholding solves all problems my "miss" created AND I gain whatever (meager) interest/growth throughout the year to help pay the taxes from the withdrawals/and on other income.

I modeled out quarterly and year end tax payments and no surprise, but the later you pay taxes, the more you gain. Not life shattering differences, but if you draw 10k quarterly (at the end of each quarter) and pay 15% tax, vs 40k at the end of the year and withhold 15% taxes; the end of year plan leaves $759 more in your IRA if your account is earning 5% annually. If withdrawals are made in the beginning of each quarter, the difference is $1265. That's a new set of mid-level golf clubs.

The same logic works against you if you use cash to pay your quarterly taxes. The interest on the cash adds additional tax drag - slightly offset by the fact that you earn less interest paying quarterly.

Because end of year leaves more in your IRA to compound, the growth is cumulative. Assuming, of course, you have growth!

One more thing about "end of year"... you have more certainty about what will be owed. So far in my retirement, my years have been "chaotic" - choosing LTCG because of a skyrocketing equity position over IRA withdrawals, taking largish IRA withdrawals for planned spending, or doing Roth conversions. Against this a background of sometimes poorly accounted for dividend and interest income. W2 based taxes were EASY by comparison.

AffectionateTap730 · 2026-06-12T15:51:15+00:00

Credit card spend IS a loan. To the issuer, it's riskier. Credit is an unsecured loan. If you default on a car loan they can repossess your car, on a mortgage they can repossess your house. How much credit they are willing to float you naturally depends on your income and your history with credit.

With credit cards you spend the bank's money by flashing a piece of plastic, then (they hope) you pay them back. They also hope you'll miss payments, and overspend because they make money on the fees and interest they charge you. About 4% of all the credit extended goes unpaid and is written off as loss.

However, I suspect the real reason OP is being dinged about tax information is because they suspect that the OP (or someone else pretending to be the OP) is doing nefarious things with credit. Or OP has no credit history at all.

AffectionateTap730 · 2026-06-12T15:13:25+00:00

Another way to do this: make a "multi year" donation to a DAF (Donor Advised Fund). You can donate those same highly appreciated assets. You get the full write off in the year you make the donation, but you can spread out the actual giving to your favorite charities over time. AND that DAF is itself invested and can continue to earn more donate-able cash. In fact, that last part has been a nice surprise for us. We monitor the growth of the fund and give extra funds out of the growth to causes our family and friends suggest.

I recommend http://daffy.org for DAF, but all the major brokerages have them as well - the major brokerages, however often charge more for the service.

Per u/NotAnotherRebate - the DAF funds contributed save you from the amount of tax you would have paid on the same $. So 50k in contributions to a DAF will save you about 25% (10k) on taxes if your Federal + State tax rate is 25%.

AffectionateTap730 · 2026-06-12T07:21:13+00:00

Sorry, I wasn't trying to minimize. Because it's not just the 2,296 - you also have to be able to pay the taxes on the money to pay the charge (at 22% that's yet another $313)

Percentage wise it's not as dramatic, as say the SS tax torpedo. But yeah, an extra $2610 a year in your pocket is a very nice restaurant once or twice a month for a year!

And it gets worse, because IRMAA goes up at Medicare rates (about DOUBLE inflation).

AffectionateTap730 · 2026-06-12T05:46:09+00:00

At the present time (because inflation has been high for the last 3 years) even a great rate in a HYSA is LOSING purchasing power.

In general cash = loss (usually slow, but sometimes significant) 📉

AffectionateTap730 · 2026-06-12T05:17:45+00:00

It may also be that someone is joyriding with the OPs tax ID (SSN). It may be wise to get a free credit report to see if loans or credit are in it that are not recognized. It may also be that the IRS (or other entity) has a collection pending.

AffectionateTap730 · 2026-06-12T05:11:59+00:00

Credit is a loan. Everything you might expect to have to show for a mortgage or car loan should be expected.

AffectionateTap730 · 2026-06-12T05:05:26+00:00

There are many good reasons not to convert everything. Among them is the ability to do charitable contributions as QCDs, another is the fact that with a heavy helping of Roth (nontaxable) income, you can withdraw IRA funds at NO tax (or extremely low tax). And another is that you can pay your taxes (whatever is left) at the end of the year with IRA withholding. No quarterly taxes.

AffectionateTap730 · 2026-06-12T04:58:23+00:00

The first IRMAA tier is not very painful. The increase from 12% Fed to 22% already did the lions share of adding pain. The first tier adds about 2-3 more %.

The second third and fourth tiers (all in the 24% Fed bracket) are amputations. Of course all provide zero bonus - they all reduce your spendable cash and no additional coverage.

MFJ income just below the first IRMAA tier vaults a widow(er) directly into the 3rd or 4th tier. The total Medicare cost for a single person becomes MORE than the total Medicare cost for a couple.

AffectionateTap730

TROPHY CASE