Account Balances
Total pre-tax retirement assets to convert
Roth contributions always accessible penalty-free
Conversion & Spending
Sized to fill your low tax bracket each year
What the ladder needs to fund per year
Tax & Age
Age at the start of your ladder (year 0)
Your bracket with no other income in retirement
2026 Bracket Targets
Assumes no other income; subtract any wages, SS, or dividends
Ladder Summary
Year-by-Year Ladder Timeline(5-year rule: each conversion unlocks 5 years after it's made)
| Year | Age | Converted | Tax Paid | Trad. Balance | Ladder Access | Bridge Gap |
|---|---|---|---|---|---|---|
| 1 | 41 | $40,000 | $4,800 | $460,000 | 5-yr wait | $50,000 |
| 2 | 42 | $40,000 | $4,800 | $420,000 | 5-yr wait | $50,000 |
| 3 | 43 | $40,000 | $4,800 | $380,000 | 5-yr wait | $50,000 |
| 4 | 44 | $40,000 | $4,800 | $340,000 | 5-yr wait | $50,000 |
| 5 | 45 | $40,000 | $4,800 | $300,000 | 5-yr wait | $50,000 |
| 6 | 46 | $40,000 | $4,800 | $260,000 | $40,000 | $10,000 |
| 7 | 47 | $40,000 | $4,800 | $220,000 | $40,000 | $10,000 |
| 8 | 48 | $40,000 | $4,800 | $180,000 | $40,000 | $10,000 |
| 9 | 49 | $40,000 | $4,800 | $140,000 | $40,000 | $10,000 |
| 10 | 50 | $40,000 | $4,800 | $100,000 | $40,000 | $10,000 |
How to Read This Table
- Converted — the amount moved from traditional IRA to Roth this year (taxable event).
- Tax Paid — federal tax on that conversion at your selected marginal rate.
- Ladder Access — the conversion made 5 years earlier, now accessible penalty-free for spending.
- Bridge Gap — how much of your annual spending the ladder doesn't yet cover; must come from existing Roth principal, taxable accounts, or part-time income.
What is Roth Conversion Ladder — FIRE Planning Guide?
The Roth conversion ladder is the cornerstone strategy for early retirement (FIRE). Because you cannot access traditional IRA and 401(k) funds before age 59½ without a 10% penalty, FIRE retirees convert pre-tax money to a Roth IRA year by year. Each converted batch must wait 5 years before being withdrawn penalty-free. By converting consistently — starting before you retire — you build a ladder where each rung unlocks exactly when you need it, providing penalty-free income well before the standard retirement age.
How to Use
- Enter your current traditional IRA or pre-tax 401(k) balance.
- Set your planned annual conversion amount — ideally sized to stay within the 12% or lower tax bracket.
- Enter your expected annual spending in early retirement.
- Set your existing Roth balance — this funds the bridge in years 1–5 while the ladder builds.
- Choose your marginal tax rate on the conversions (based on your other income and filing status).
- The 15-year table shows each year's conversion, the 5-year unlock date, and the funding gap covered by your existing Roth or taxable accounts.
Why Use This Tool?
Tips & Best Practices
- Start the ladder 5 years before your target retirement date so the first rung is already accessible when you leave work.
- The optimal conversion amount fills your tax bracket without triggering IRMAA, NIIT, or ACA subsidy cliffs.
- Pay conversion taxes from taxable brokerage funds, not the IRA itself — this preserves more in the Roth.
- In years where you have large deductions (mortgage interest, medical expenses), you can convert more at 0% or 10%.
- Existing Roth contributions (not earnings) can always be withdrawn penalty-free — these are your best bridge asset.
- If you reach age 59½ while the ladder is running, the 5-year rule no longer applies to the conversion penalty — but earnings still need 5 years.
Frequently Asked Questions
What is a Roth conversion ladder?
A multi-year strategy for FIRE retirees: convert traditional IRA money to Roth each year, wait 5 years, then withdraw penalty-free. Each year's conversion is a rung — once the ladder is running, every year a new rung unlocks to fund living expenses.
How does the 5-year rule work for each conversion?
Each Roth conversion has its own 5-year clock starting January 1 of the conversion year. Money converted in 2026 is accessible penalty-free in 2031; money converted in 2027 unlocks in 2032. This per-conversion clock (not the account age) is what the ladder exploits. Once you turn 59½, the conversion penalty no longer applies at all.
How much should I convert each year?
Ideally, fill your low tax bracket without triggering higher marginal rates. For a single FIRE retiree with no other income in 2026: the 12% bracket covers taxable income up to $50,400 ($16,100 standard deduction + $34,300 at 12%), so you can convert up to about $34,300 and owe roughly $4,100 in federal tax. Married couples can convert up to ~$68,600 in the 12% bracket.
What covers spending in years 1–5 before the ladder produces income?
Bridge assets: (1) existing Roth IRA contributions — principal is always accessible penalty-free; (2) taxable brokerage accounts — long-term gains taxed at 0%–15%; (3) cash or money-market savings; (4) part-time or side income. Having 5+ years of bridge assets is the key to a clean early retirement.
What happens to traditional IRA money I never convert?
It stays in the traditional IRA and is subject to Required Minimum Distributions (RMDs) starting at age 73 (or 75 under SECURE 2.0). RMDs are taxed as ordinary income and can push you into higher brackets, trigger IRMAA surcharges, and cause Social Security taxation. The ladder's goal is to deplete (or dramatically reduce) the traditional IRA before RMDs begin.