How a Roth Conversion Ladder Works
Money in a traditional 401(k) or IRA is locked until 59½: take it earlier and you pay income tax plus a 10% penalty. The ladder is the way around it. Each year you convert one year of spending from traditional to Roth and pay ordinary income tax on it. Five tax years later that conversion comes out of the Roth with no tax and no penalty. IRS Publication 590-B: the five-year period for each conversion starts on January 1 of the year you convert, and a separate period applies to each one (irs.gov).
The ladder starts the first year your income drops, usually the year after you stop working, when the low brackets are empty. Convert at 45, spend it from 50. Convert again at 46, spend it from 51. The last rung that seasons before 59½ is the one converted at 54. On the default that is 10 rungs of $40,000. The Bogleheads Roth conversion page covers the wider case for converting in low-income years.
The 5-Year Bridge Nobody Budgets For
The first rung is usable five years after you convert it, so the first five years of retirement need other money: $200,000 on $40,000 a year. It comes from a taxable brokerage account, cash, or Roth IRA contributions (never taxed or penalized, any time). Count it before you quit. Retiring with $600,000 in a 401(k) and nothing else does not work on a ladder alone; the bridge is the part of the plan that has to be saved outside it. The Bogleheads early retirement page lists the other routes to the money.
What Each Rung Costs in Tax
A conversion is ordinary income. With no other income, the first $16,100 is covered by the 2026 standard deduction ($32,200 married filing jointly), then taxable income up to $12,400 is taxed at 10% and up to $50,400 at 12% (married filing jointly: $24,800 and $100,800). A $40,000 rung single costs $2,620, 6.6% of the rung; married filing jointly, $780. Over 10 rungs that is $26,200 single, $7,800 joint.
Rung size is the lever. Every dollar past the top of the 12% bracket is taxed at 22%, so a rung that fits under it is cheap and one that doesn't is not. Other income stacks underneath: with a $30,000 pension, the same $40,000 rung single costs $5,150. Federal only: state tax on conversions differs, the Fire Planner has all 50 states.
| Rung a year | Federal tax, single | Rate | Federal tax, joint | Rate |
|---|---|---|---|---|
| $30,000 | $1,420 | 4.7% | $0 | 0.0% |
| $40,000 | $2,620 | 6.6% | $780 | 1.9% |
| $66,500 | $5,800 | 8.7% | $3,620 | 5.4% |
| $80,000 | $8,770 | 11.0% | $5,240 | 6.6% |
| $100,000 | $13,170 | 13.2% | $7,640 | 7.6% |
$66,500 is the largest rung that stays in the 12% bracket on a single return in 2026 ($16,100 deduction + $50,400). Married filing jointly, the calculator assumes your partner was born the same year as you and all income is what you enter here.
Ladder vs. the 10% Penalty vs. 72(t)
The ladder. Pay ordinary income tax on each rung when you convert, wait five years, withdraw free. Cheapest if you can fund the bridge. On the default: $26,200 in federal tax.
The 10% penalty. Withdraw from the traditional account when you need it and pay the tax plus 10%. No bridge, no waiting, and simple. On the same amounts it costs $66,200, $40,000 more. Not crazy if the bridge is the problem: a few penalized years can beat working longer.
72(t) payments. Substantially equal periodic payments: a fixed yearly withdrawal on an IRS formula, penalty-free, that must continue for five years or until 59½, whichever is longer (irs.gov). No bridge, but rigid: break the schedule and the penalty applies to every payment back to the first. This calculator does not compute 72(t).
Which Calculator Do You Need?
| Your question | Calculator |
|---|---|
| How long will my money last? | Retirement withdrawal calculator |
| How often does my plan survive 500 random markets? | Monte Carlo retirement calculator |
| Should I claim Social Security at 62, 67 or 70? | Social Security break-even calculator |
| How do I get to my 401(k) before 59½? | This page |
| How much do I need, and when do I get there? | FIRE calculator |
| I have a target in mind. When do I reach it? | When Can I Retire? |
| Just the number, from my spending | FIRE number calculator |
| Can I stop saving and let it grow? | Coast FIRE calculator |
| What if I keep working part-time? | Barista FIRE calculator |
| Retiring on a tight budget | Lean FIRE calculator |
| Retiring on $100,000+ a year | Fat FIRE calculator |
| My whole plan: income, taxes, a crash in year one | Fire Planner (Monte Carlo + backtesting) |
Frequently Asked Questions
Yes, any year. It usually costs more: the conversion lands on top of your salary, at your highest bracket. The ladder starts the first year your income drops because that is when the 10% and 12% brackets are empty. If you retire mid-year, the partial-salary year can still hold a small rung.
Conversions count as income for the ACA premium tax credit, so a big rung can cost you subsidy on top of the tax. This calculator shows federal income tax only. The Fire Planner with US taxes on computes the premium credit every year and has a Roth conversion rule that converts only up to the credit's income limit.
Each conversion has its own five-year clock, and only the converted amount comes out penalty-free once it has seasoned. Earnings on it stay in the account until 59½ (and the account's own five-year rule) or they are taxed and penalized. IRS ordering rules take your regular contributions out first, then conversions oldest first, then earnings (IRS Publication 590-B). So in practice you spend rungs and leave the growth.
Fewer rungs. The last rung that still seasons before 59½ is converted at 54, so retiring at 50 gives five rungs and the same five-year bridge. Retire at 55 or later and no rung seasons in time: you bridge to 59½ from taxable savings, Roth contributions, or the Rule of 55 on the 401(k) of the employer you leave in or after the year you turn 55 (IRS exceptions list). Conversions can still make sense then, for taxes later rather than access now.
Rungs live in a Roth IRA. After you leave your job, roll the traditional 401(k) into a traditional IRA and convert from there each year. Money already in a Roth 401(k) can roll into a Roth IRA, where its contributions count as basis you can withdraw any time.
This page is federal only. State tax on conversions differs: some states have no income tax, some exempt retirement income, a few tax it like wages. The Fire Planner with US taxes on has all 50 states and DC and taxes each rung where you live.
The result button opens the Fire Planner with US taxes on, your traditional balance, your retirement age and a fixed conversion of your rung each year until the age after the last rung. The planner then runs the ladder month by month next to your other accounts, taxes each rung on the same federal tables plus your state, and grades whether the money lasts. Free, no sign-up. No account. The planner runs in your browser and your plan is saved there, not on our servers.