The Roth conversion ladder, honestly

A Roth conversion moves money from a Traditional 401(k)/IRA into a Roth — voluntarily paying income tax now so the money grows and comes out tax-free forever after. On its face that's paying a bill early. The reason it can be brilliant: tax rates aren't constant across a life.

The classic window is early retirement, after the paycheck stops but before Social Security and RMDs begin. In those years taxable income can be nearly zero — meaning tens of thousands of dollars can be converted through the 10% and 12% brackets that would otherwise come out at 22% or more later, forced out by required minimum distributions. Same money, same owner, wildly different tax bill depending on when it crosses.

The standard strategy is fill the bracket: convert exactly enough each year to use up a low bracket, and stop at the line. It's a yearly decision, not a one-time event.

The ladder stacks a second payoff on top: five years after each conversion, that amount becomes withdrawable penalty-free at any age — so a yearly conversion habit becomes a conveyor belt of reachable money for someone retired before 59½. Two honest requirements come with it. You need about five years of already-accessible savings to live on while the first rungs season. And the ladder only makes sense in low-tax years: a conversion is taxed at your marginal rate, and the thing it avoids is a 10% penalty, so paying more than ten extra points of tax to convert early is a losing trade against simply taking the penalized withdrawal later. The exceptions are one-offs — an unusually low-income year, converting into a market crash — not standing strategies.

The other catches are unglamorous but real. A conversion is irreversible (no undo since 2018). The tax is due that year, ideally paid from cash outside the retirement account — paying it from the converted money shrinks the very balance you're moving. A big conversion can push you into the bracket you were avoiding, or across income cliffs like Medicare's IRMAA surcharges, which are priced on your income from two years earlier. And the whole bet loses if your future rate turns out lower than today's.

Whether any of this is worth doing is not a slogan question — it's arithmetic on your brackets, your window, and your balances. The fill-the-bracket calculator on this site walks the conversion through the real federal brackets from your other income; the deeper version (modeling conversions against RMDs, the ladder against your actual bridge years, and the lifetime tax bill both ways) is what the app's Plan does.

Model it with your own numbers

Reading about the strategy is the small piece. Tesserae models the whole thing — every account, taxes on withdrawals, Social Security, Roth conversions, RMDs, and the odds your money actually lasts. Privacy-first: you enter your own numbers, and we never touch your bank login.