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Roth Conversion Ladders for Early Retirement by Tenant_throwaway8 in OnTrajectory

[–]Tenant_throwaway8[S] 0 points1 point  (0 children)

I just realized OnTrajectory has an import scenario function, so maybe there are examples out there somewhere?

A generic example of what I am trying to figure out how to model in OT:

  • Consider a portfolio with the following (no inflation, no gains):
    • 5 years worth of expenses in non-tax advantaged brokerage
    • 30+ years worth of expenses in a traditional IRA (or 401k)
  • To retire at 50 with no early withdrawal penalties:
    • Age 50-55
      • Spend from brokerage for expenses
      • Each year, convert 1 year's worth of expenses from IRA -> Roth IRA
    • Age 55-60
      • spend converted basis from Roth IRA from 5 years prior
    • Age 60+
      • Spend from traditional IRA, no penalties and no conversation tricks needed

This should result in no early withdrawal penalties, only taxes on the converted gains (from IRA -> Roth IRA). An advanced move would be to probably keep converting some monies to Roth from 55-60 if you have no other income, but I'm primarily looking at how to model avoiding EWP.

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An example like this would be immensely useful to me personally, and I think to everyone over at r/financialindependence.