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Am interested if anyone has come across an online estimator as to timing of a conversion to a Roth IRA. Given uncertainties around (future) marginal tax and interest rates, it seems a good niche for some AI supported output.

Here is what i see as base inputs :

- age
- filing status
- estimated year to start SS income
- past year taxable income
- estimated forward year(s) taxable income
- current state rate for taxable income

My understanding is that this type of feedback should be independent of any existing Roth amount. However, it is interesting to note there is some mix of investment professionals who have fled to PR believing, among other things, a retrospective tax on Roth IRA will inevitably follow the new 10yr withdrawal rules for inheritors.

Here is what i see as base inputs :

- age
- filing status
- estimated year to start SS income
- past year taxable income
- estimated forward year(s) taxable income
- current state rate for taxable income

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I will tell you what I did, and you can determine to what extent it picks up the variables you mention.

You don't mention existing TIRA balance. My goal was to have mine completely converted to Roth before RMD's start. Any dollars I took in the form of RMD's would never make it to the Roth.

I knew how many years remained before the start of RMD's and I had an existing balance (plus growth over ensuing years) so dividing by years gave me a target amount to convert each year. Then I had to look at what marginal rate a conversion of that size would be taxed. I wanted to max out the 25% bracket but go no higher. That caused me to have to scale back on the annual conversion which is one reason I have about 3-4 more years of conversions to go and I will have to take RMD's in the last 2 or 3 of them. The message here is even though I been converting for ten years or so, I should have started sooner.

One big mistake I made in the early years was having Vanguard withhold 20% of the conversion for taxes so only 80% made it into the Roth account. Once I wised up. I let the entire conversion amount go into the Roth, and I paid the additional taxes from a separate taxable account.

The other mistake I made was not reflecting IRMAA in my calculations of an amount to convert. Roth conversions drive up your AGI as far a IRMAA is concerned. I was solely focused on Marginal Tax Rate. This factor only matters in the two years prior to when you start on Medicare. Had I started Roth conversions earlier, they wouldn't be driving my income as high in the IRMAA brackets as they presently are. In my case I am now paying an extra $500 a month or so for Medicare each month as a consequence. This penalty will drop once my TIRA is empty but could had been mostly avoided if I was smarter at the outset.

Lots of moving parts. Good Luck.

thx for the details, we are on the same page.

Actually became motivated when i noticed how IRMAA was hitting relatives on their 2020 taxes and morningstar hosted an excellent podcast in ~2022. (noting these stealth taxes are ones all political parties increase at the highest nonlinear rates since voters dont know\understand them)

Had no plans to ever hit RMD events, but wanted to find an 'optimal' rate where i could fund the Roth (conversion) taxes with already sufficient non-retirement liquidity.
due to some quirks, i have a few years prior to medicare where my earned income will dip in a very predictable manner, while my taxable investment income may change by an estimated +/- 30% annually.
issue is whether this gap will be enough years to split up the tIRA (now also holds converted 401k). want to avoid my Roth conversion years annoyingly becoming my highest tax years, and so am thinking i need to quantitatively schedule smaller amounts even a few years before the upcoming earned income dip.

Given the uncertainties and complexities at play, i was looking for a probability weighted models considering current\future interest and marginal tax rate patterns. monte carlo models for retirement planning was a major breakthrough* 20+ years ago, but that technology should be (hopefully) surpassed by now with a tool for this specific issue of Roth conversion.

All of this could be stymied by more retrospective congressional changes to Roth, which we have seen start with the 10yr inherited limit.

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*https://en.wikipedia.org/wiki/Edelman_Financial_En...

Given the uncertainties and complexities at play, i was looking for a probability weighted models considering current\future interest and marginal tax rate patterns. monte carlo models for retirement planning was a major breakthrough* 20+ years ago, but that technology should be (hopefully) surpassed by now with a tool for this specific issue of Roth conversion. - weatherman

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Probability models? Still imprecise. I think you are making this more complicated than it needs to be.

The method I have been using only looks to the next tax year and then to to convert the max possible up to the limit of the 24% bracket (reverting to 26% when Trump tax cuts expire). That only requires predicting one year into the future and if you wait until December to make your conversion, you only have one month to predict. Just convert the max possible given the constraint each year and let the chips fall where they may. There is no penalty for draining your TIRA a year or two or three before RMD's would have started. Once you are within two years of Medicare then the secondary constraint of IRMAA enters the picture.

thx.
i think i will end up doing some % of the max (divided by years) starting in December, deferring the bulk until my upcoming dip years in earned income.
the sensitivity seems too great for many uncertain variables, including small changes in overall asset allocation profile (e.g., 'moderate' vs 'conservative' equities) pre and post conversion.

by the time i hit medicare, even those that moved to PR may be in for a surprise if granted statehood.

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