Episode 5 of 6
The Roth Conversion Ladder
Sam discovers a strategy for his early retirement years: convert Traditional 401(k) funds to Roth in the low-income window between retirement and Social Security. He models the 5-year Roth conversion ladder and the tax savings are significant.
Key Insight
Converting $45k/year during 5 low-income years moves $225k from Traditional to Roth at an effective 12% tax rate instead of the 24% rate he'd pay later. Total tax savings: $27,000 over the conversion window.
Model This Scenario