Roth Conversion Ladder

What a Roth conversion ladder is

A Roth conversion ladder is a deliberate, multi-year strategy for converting pre-tax retirement funds (Traditional IRA, 401(k), 403(b)) to Roth status during years when your taxable income is low — converting enough each year to fill up lower tax brackets without triggering higher brackets or Medicare surcharges (IRMAA).

The goal: reduce the total taxes paid on your retirement savings over your lifetime, by paying tax at today’s low marginal rate rather than at the marginal rate you’d face in later years when RMDs, Social Security, and potentially other income push you into higher brackets.

When the ladder works

The strategy requires a “window” of low-income years. Common windows:

Early retirees before Social Security / RMDs: If you retire at 60, you may have 13 years before Social Security (70) and at least 13 years before RMDs (currently age 73, rising to 75 under SECURE 2.0) when income is relatively low. This is the primary Roth conversion window.
FIRE early retirees before traditional retirement age: If you retire at 45-50, you may have 20+ years of low-income before Social Security and RMDs — an extended conversion window.
Job loss or sabbatical years: A year of dramatically reduced income is an opportunity for an accelerated conversion.

The 5-year rule constraint

Converted Roth funds (contributions) can be withdrawn without the 10% early withdrawal penalty after a 5-year waiting period (the “5-year conversion clock”). The conversion ladder exploits this: convert in Year 1, withdraw in Year 6, convert more in Year 2, withdraw more in Year 7, and so on.

This 5-year lead time requires planning ahead if you’re counting on Roth withdrawals before age 59.5.

Tax bracket targeting

The art of the Roth conversion ladder is converting the right amount each year — enough to “fill up” the current tax bracket without crossing into the next bracket or triggering IRMAA.

For a married couple filing jointly in 2026, the tax brackets are approximately:

10%: $0 - $23,200
12%: $23,200 - $94,300
22%: $94,300 - $201,050
24%: $201,050 - $383,900

A common strategy: convert up to the top of the 12% or 22% bracket each year. The exact amount depends on other income (Social Security, dividends, part-time work).

IRMAA cliff warning: Medicare Part B and D premiums are means-tested. If your MAGI exceeds specific thresholds (approximately $103,000 single / $206,000 married in 2026), you pay a surcharge. Roth conversions that push you over the IRMAA cliff can cost $2,000-$8,000 extra in Medicare premiums — more than the tax saving from the conversion.

Boldin PlannerPlus models the IRMAA cliff interaction with Roth conversions. This is one of the reasons it’s the recommended tool for pre-retirees doing Roth conversion planning.

Tools that model this well

Boldin PlannerPlus: Year-by-year Roth conversion with IRMAA cliff modelling — the best tool in the $0-$200/yr tier for this use case
Maxifi Planner: Strong lifecycle model; also handles IRMAA, but steeper learning curve
ProjectionLab: Basic Roth conversion input; thinner than Boldin on tax-bracket targeting

Primary sources

IRS Publication 590-A — Contributions to Individual Retirement Arrangements (IRAs); covers Traditional-to-Roth conversion rules
IRS Publication 590-B — Distributions from IRAs; covers Roth withdrawal ordering and the 5-year rule
CMS IRMAA thresholds — Medicare income-related premium adjustment amounts