Deorbit Plan

Roth conversion ladder calculator: your year-by-year schedule

What to convert each year, when each rung becomes penalty-free, and the bridge you need first

By the Deorbit Plan editorial team, a Berrydyne program · Last reviewed · Topic: Roth conversions

What it computes

A Roth conversion ladder pays for early retirement by converting traditional IRA money to a Roth a few years before you need it. Converted dollars can be withdrawn without the 10% early-withdrawal penalty once five tax years have passed, counting the year of the conversion[7], or once you reach age 59.5[3]. Each year’s conversion is a rung. The first rung is not ready for five years, so those years need other money, called the bridge. This tool lays out the schedule with the same five-year test the simulator uses[2].

Roth conversion ladder schedule

Convert $40,000 a year for 5 years ($200,000 in all). The first rung is spendable in 2035; until then you need a $200,000 bridge from other savings for 5 years.

Year by year. A conversion made in a year is penalty-free from January 1 of the year 5 years later.

YearAgeConvertPenalty-free fromThis year’s spending comes from
203050$40,000Jan 1, 2035Bridge (other savings)
203151$40,000Jan 1, 2036Bridge (other savings)
203252$40,000Jan 1, 2037Bridge (other savings)
203353$40,000Jan 1, 2038Bridge (other savings)
203454$40,000Jan 1, 2039Bridge (other savings)
203555nonenoneRung converted in 2030
203656nonenoneRung converted in 2031
203757nonenoneRung converted in 2032
203858nonenoneRung converted in 2033
203959nonenoneRung converted in 2034
204060nonenonePenalty-free by age
  • Bridge needed: $200,000 (5 years of spending before the first rung is seasoned), highlighted in the table.
  • Total converted: $200,000 over 5 rungs. From 2040 (age 60) withdrawals are penalty-free by age and the ladder is no longer needed.

Whole calendar years, as in the simulator: the age test is applied to your age in each year, so the year you turn 59.5 itself is treated cautiously. Amounts are the same dollars every year; tax on each conversion is not shown.

Worked example

Someone born in 1980 retires in 2030 at age 50 and needs $40,000 a year from the ladder. They convert $40,000 in 2030; that rung is penalty-free from January 1, 2035. Converting the same amount each year through 2034 builds 5 rungs ($200,000), enough for every year until 2040, when age alone makes withdrawals penalty-free.

The first 5 years (2030–2034) have no seasoned rung yet, so they need a $200,000 bridge from a taxable account, cash, Roth contributions (which can come out at any time) or another penalty exception. Starting conversions earlier, while still working, shrinks the bridge but adds the conversions to working-year income.

What it ignores

  • Income tax on each conversion. See the conversion room calculator for how much fits in each bracket.
  • Inflation, investment growth and spending that changes from year to year.
  • The separate five-year rule for tax-free earnings, and the order rules that take contributions out before conversions.
  • Other penalty exceptions (substantially equal payments, the age-55 rule for workplace plans).
  • The exact date you reach 59.5: the table works in whole years.

The rule behind it

The full explanation, with sources, is in Roth ladder: how a Roth conversion ladder works.

See it over a full plan

Each conversion is taxed in the year you make it. The simulator runs a ladder over your whole plan, with the tax on each conversion and the accounts that pay for the bridge. Open it in the simulator →

If you already have a saved plan, the link only takes you to the right panel; your plan is not changed.

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This tool shows how the rules work. It is not financial, tax or investment advice. See the disclaimer.

Sources