Roth Conversion Ladder Calculator – Simulate Tax-Free Early Retirement

A Roth conversion ladder is an advanced retirement decumulation strategy used primarily by the FIRE (Financial Independence, Retire Early) community. It involves converting portions of a Traditional IRA or 401(k) into a Roth IRA year by year during low-income years — typically early retirement before age 59½ — deliberately filling low federal tax brackets that would otherwise go unused.

This calculator plans that ladder year by year: it maps your income against the IRS federal brackets for the selected tax year, computes exactly how much room exists up to your target bracket, calculates the incremental federal and state tax on each conversion, and projects the tax-free Roth balance you build — including when each rung of the ladder becomes accessible under the 5-year rule.

What is a Roth conversion ladder?

When you retire early, your income often drops dramatically: no salary, and you may be living off taxable savings, so your taxable income sits in the lowest brackets. Meanwhile your Traditional IRA is a deferred tax bill — every dollar withdrawn later is taxed as ordinary income, and Required Minimum Distributions (RMDs) force withdrawals starting at age 73 or 75 under SECURE 2.0.

The ladder exploits the gap: each year you convert just enough to fill the 10% or 12% bracket (plus any unused standard deduction), paying a low tax rate now to avoid a potentially much higher rate later. After five years, each converted amount can be withdrawn penalty-free even before 59½ — creating a ladder of accessible, tax-free money that bridges you to traditional retirement age.

How bracket filling works

The IRS taxes income in layers (brackets). For tax year 2025, a Single filer's income is allocated as follows:

• 0% on the first $15,000 of income (the standard deduction)
• 10% on income between $15,000 and $26,925
• 12% on income between $26,925 and $63,475
• 22% on income between $63,475 and $118,350
• higher brackets (24%, 32%, 35%, 37%) above that

Example: if your other retirement income is $25,000, your taxable income is $10,000 — leaving $1,925 of room in the 10% bracket and $36,550 of room in the 12% bracket. You could convert up to $38,475 at a blended federal rate of roughly 12% or less. This calculator performs exactly this mapping for every year of your ladder, including the standard deduction zone.

The 5-year rule and early access

Every conversion has its own 5-year clock. Five years after a conversion (measured from January 1 of the conversion year), that converted principal can be withdrawn from the Roth IRA penalty-free even if you are under 59½, because IRS ordering rules take conversions out before earnings, and the 10% early-distribution penalty does not apply to seasoned conversions.

This is what makes the ladder work for early retirees: convert at 45 and by 50 you have a pool of tax-free, penalty-free money to live on, bridging the gap to 59½.

How this calculator models your ladder

• Each year, your other income is projected with your chosen growth rate, then mapped against the IRS brackets and standard deduction for the selected tax year
• In 'fill up to bracket' mode, the conversion is sized automatically to stop at the top of your target bracket; in fixed mode you set the amount and any spill into higher brackets is flagged
• Federal tax on each conversion is the difference between tax on your total income and tax on your other income alone; state tax uses your state's treatment of IRA distributions (0% in states like Florida, Texas, Pennsylvania and Illinois)
• Both accounts grow at your assumed returns; conversion tax can be paid from outside funds (optimal) or withheld from the conversion
• At the end of the ladder, your after-tax position is compared against doing nothing, using the future marginal rate you expect at withdrawal

Assumptions and limitations

• Federal brackets and the standard deduction are fixed at the selected tax year; future-year inflation indexing is not projected (note that several TCJA provisions sunset after 2025, which could change brackets)
• State tax is applied as a flat effective rate; progressive state brackets are approximated
• Not modeled: the Net Investment Income Tax (NIIT), IRMAA surcharges on Medicare premiums, ACA subsidy cliffs, and the pro-rata rule if you hold after-tax money in any Traditional IRA
• The 5-year access ages shown are simplified to conversion age + 5; the actual rule runs from January 1 of the conversion year
• If your ladder extends past RMD age (73 or 75 depending on birth year), remember RMDs must be taken first and cannot be converted