Roth Conversion Ladder Calculator

A Roth conversion ladder is a multi-year strategy for moving pre-tax retirement money (Traditional IRA or 401(k) balances) into a Roth IRA a bracket at a time, rather than converting everything at once and pushing a huge amount of income into the highest marginal rates in a single year. Each year, you convert only as much as fits underneath a target bracket ceiling, given whatever other taxable income you already have. Do this consistently for enough years and the entire balance eventually moves to Roth, where it grows tax-free and is not subject to Required Minimum Distributions during the original owner's lifetime.

The "ladder" name comes from a second mechanic layered on top of the tax planning: each individual year's conversion is its own separate transaction for purposes of the five-year rule that governs penalty-free access to converted principal before age 59½. A conversion made this year has its own five-year clock; a conversion made next year starts an entirely new, independent five-year clock. Do this every year and you build a "ladder" of tranches that become accessible on a rolling basis, one rung freeing up each year once the strategy has been running for at least five years.

This calculator projects the full multi-year ladder: how much room you have to convert each year without crossing your chosen bracket ceiling, how many years it takes to convert the entire balance at that pace, the total federal tax the strategy costs, and the specific year each tranche clears its five-year penalty-free clock.

Step 1: Determine the annual conversion room. Using the current year's standard deduction and bracket schedule for your filing status, this calculator subtracts your other taxable income (after the standard deduction) from the top of your target bracket:

$$\text{Annual Room} = \max(0,\ \text{Target Bracket Ceiling} - \max(0,\ \text{Other Income} - \text{Standard Deduction}))$$

That is how much additional taxable income you can add via conversion before crossing into the next, higher bracket.

Step 2: Convert the lesser of the annual room or the remaining balance, each year. In every simulated year, the conversion amount is $\min(\text{Annual Room}, \text{Remaining Balance})$. Once the remaining balance drops below a full year's room, that year's conversion is a smaller, final "partial" tranche that finishes the ladder.

Step 3: Compute that year's tax using the same bracket-stacking method used for a single backdoor conversion. The tax owed is the difference between total tax computed with the conversion added on top of other income and total tax computed without it:

$$\text{Tax on Conversion} = \text{Tax}(\text{Other Income} + \text{Conversion}) - \text{Tax}(\text{Other Income})$$

Step 4: Apply growth to whatever remains unconverted, and repeat. After each year's conversion is subtracted, the remaining traditional balance grows by your assumed annual rate before the next year's conversion is calculated. The simulation continues until either the balance is fully converted or a 60-year safety cap is reached, since a sufficiently large balance can, under some inputs, grow faster than a fixed annual conversion amount shrinks it (a genuine possibility this calculator surfaces rather than hides, covered further below).

Step 5: Track the five-year clock for every tranche. Each year's conversion tranche becomes penalty-free for withdrawal of converted principal after that same year number plus five, independent of every other tranche's clock.

A single filer with $500,000 sitting in a Traditional IRA, $80,000 of other taxable income each year, filling up the 22% bracket (2026 brackets: standard deduction $16,100, 22% bracket spanning $50,400 to $105,700 of taxable income), assuming 5% annual growth on the unconverted remainder.

• Taxable other income: $80,000 − $16,100 = $63,900, already inside the 22% bracket.
• Annual conversion room: $105,700 − $63,900 = $41,800, which lands stacked taxable income exactly at the 22% ceiling, so the full $41,800 conversion is taxed at a flat 22% every year it applies: $41,800 × 22% = $9,196.00 in year 1.
• Remaining balance after year 1: ($500,000 − $41,800) × 1.05 = $481,110.00.
• Repeating this pace, the balance shrinks each year (since $41,800 in withdrawals outpaces 5% growth on a shrinking base) until, in year 18, only $11,875.48 remains, a smaller final tranche taxed at $2,612.61.
• Total years to fully convert: 18. Total tax paid across all 18 tranches: $158,944.61, an average effective rate of 31.79% on the $500,000 converted, higher than the 22% marginal rate because the running total still includes the original $8,770.00 of tax owed on the $80,000 of other income embedded in each year's stacked calculation methodology, even though only the incremental tax is counted toward the total.
• Five-year clock: the year 1 tranche is penalty-free starting after year 6; the final, year 18 tranche is penalty-free only after year 23, five full years after its own conversion.

A fixed annual conversion room only shrinks the remaining balance if the dollar amount converted each year exceeds the dollar amount of growth on the balance that year. At a $41,800 annual room and 5% growth, the breakeven remaining balance is $41,800 × (1/0.05 + 1) = $877,800. Above that threshold, growth on the unconverted remainder outpaces the fixed conversion amount every single year, and the balance grows indefinitely rather than shrinking toward zero. A $1,500,000 starting balance under this calculator's default pace never completes: after the 60-year simulation cap, the "remaining" balance is actually larger than the amount you started with. This is not a bug in the model; it is a genuine strategic finding. Someone in this position needs either a larger annual conversion room (a higher target bracket ceiling), a longer time horizon before they need the funds, or acceptance that only part of the balance will ever move to Roth at this bracket-filling pace.

• Inflation adjustments to brackets, the standard deduction, or other income. This calculator holds all three constant in today's dollars across every simulated year; real bracket thresholds are adjusted annually for inflation, and real income often changes too.
• State income tax on the converted amount, which varies widely by state and is not included here.
• The Net Investment Income Tax, Additional Medicare Tax, or IRMAA surcharges, all of which can be triggered or worsened by a large conversion pushing income higher, independent of the federal bracket math modeled here.
• Required Minimum Distributions that may apply to the traditional balance during the conversion years once the account owner reaches the applicable RMD age, which would force some distributions regardless of the conversion strategy.
• Market volatility. The growth rate applied to the unconverted remainder is a flat assumed annual figure, not a simulated sequence of actual variable returns.
• The Roth IRA five-year rule for earnings, a separate five-year requirement (measured from your very first Roth contribution or conversion, not per-tranche) that governs tax-free treatment of investment earnings, distinct from the per-tranche conversion five-year rule this calculator tracks for penalty-free access to converted principal.

• Converting a fixed dollar amount instead of filling to a bracket ceiling. A flat conversion amount that made sense in one year can silently push you into a higher bracket in a later year if other income changes; recalculating the ceiling-based room each year keeps the strategy on target.
• Forgetting each tranche has its own five-year clock. Withdrawing converted principal from last year's tranche does not free up this year's tranche; every single year's conversion must independently clear five years before penalty-free access, even though ordering and accounting can get confusing with several tranches outstanding at once.
• Assuming a large enough balance will always eventually finish converting. As shown above, a fixed-pace ladder can mathematically fail to ever finish if growth on the unconverted remainder consistently exceeds the conversion amount; the pace has to be large enough relative to the balance, not just non-zero.
• Ignoring RMDs during the conversion window. If the account owner reaches RMD age while still converting, the required distribution amount must generally come out first and is separately taxable, on top of (and not reducible by) the ladder conversion for that year.
• Double-counting the tax cost. The tax owed is the incremental tax caused by adding the conversion on top of existing income, not the conversion amount times the target bracket's rate applied naively; a partial final tranche, or a conversion that straddles two brackets, produces a blended effective rate rather than a single clean percentage.

• Internal Revenue Service Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs).
• Internal Revenue Service Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs), five-year rule guidance for conversions.
• Internal Revenue Service Revenue Procedure 2025-32 (Internal Revenue Bulletin 2025-45), 2026 inflation-adjusted federal income tax brackets and standard deduction amounts.
• Internal Revenue Service Form 8606 and Instructions, Nondeductible IRAs.