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Jul 10, 2021 · Okay, so this is Yet Another Roth Conversion question. But it comes with a spreadsheet for you numbers freaks! I have just retired, so things are more real. And I read the McQuarrie article, which has made me question my original plan to do as many Roth conversions as practical. Age: 59 Filing Status: Single
- General Context
- User Inputs
- Key Assumptions
- Description of The Calculation Process
- Formulas For The Calculation Process
The Roth Conversion Calculator (RCC) is designed to help investors understand the key considerations in evaluating the conversion of one or more non-Roth IRA(s) (i.e., traditional, rollover, SEP, and/or SIMPLE IRAs) into a Roth IRA, but it is intended solely for educational purposes – it is not designed to provide tax advice, and the list of factor...
“How much money are you considering converting?” [The value entered is hereafter referred to as ConvertBal] Note that this amount could be, but doesn't have to be, equal to the entire balance of al...“Have you ever made a non tax-deductible contribution to your non-Roth IRA(s)?” If you have ever made a non tax-deductible contribution to any non-Roth IRA, or if you have inherited (and treat as y...“How much basis (total of all non tax-deductible contributions) is in your IRA(s)?” [Basis] Include any non tax-deductible contributions you've ever made to any non-Roth IRAs, but only if they're r...“Including the IRA(s) you’re planning to convert, what is the total combined balance of all of your non-Roth IRAs?” [TotalTradBal] This should include the total balances in all non-Roth IRAs regist...Portfolio Return Each of the hypothetical TAMs, or investment styles, comes with a different expected rate of return used in the calculation. In mathematical terms, this value corresponds to the geometric growth rate, sometimes also referred to as the compound rate of return. It is of course impossible to know in advance what the returns to any giv...
The Roth Conversion Calculator operates by comparing the final, post-tax values of the assets under consideration given two distinct scenarios: The With Conversion Scenario Under this scenario, it is assumed that a given balance held in a non-Roth IRA (ConvertBal) is converted into a Roth IRA, and the income tax liability incurred by doing so is pa...
To perform the calculations needed to evaluate a Roth conversion, a number of intermediate values are needed in addition to the User Inputs and Key Assumptions listed above. They are as follows: The final value of under both the Conversion Scenario and the No Conversion can then be calculated as follows: 884737.2.2
- 5.54%
- 3.50%
- 6.18%
For example, let’s say you can do a $20,000 Roth conversion and remain in the 12% income tax bracket. In this case, you will pay $2,400 in taxes to do the conversion. If in the future your IRA withdrawals would be subject to 22% income tax rate, you would pay $4,400 in taxes in the future.
WealthTrace is more comprehensive than any free Roth conversion calculator and will allow you to run accurate Roth conversion scenarios. The topic has gotten a lot of press in recent years. The question really comes down to the best way to minimize one's taxes. With a traditional IRA, you contribute pre-tax dollars, and only pay taxes on the ...
Aug 23, 2024 · A Roth conversion ladder is a multiyear strategy designed to give you tax-free and penalty-free IRA withdrawals before you reach the standard age (59 ½) for distributions. To create the ladder ...
- Jean Folger
Aug 6, 2017 · Link to a free spreadsheet investors can use to calculate potential tax savings (or tax losses) from a Roth IRA conversion. You may not realize it, but under today's tax laws, if you earn $75,900 ...
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This Roth conversion calculator shows what might happen if you reduce your pre-tax retirement account balances. The result should be smaller RMDs. Important: This calculator shows that if you convert pre-tax money to Roth, you’ll pay less in taxes later and have smaller RMDs—but that doesn’t necessarily mean that converting is the right ...
