Roth Conversion Ladder
Calculator 2026

What is a Roth conversion ladder?

In one line: convert a slice of a Traditional IRA to a Roth IRA every year, pay the income tax that year, and withdraw each slice with no 10% penalty once its own 5-year period ends, even before 59½. In the worked example below, a couple who retire at 45 and convert $80,000 a year from 2026 make their first penalty-free withdrawal on 1 January 2031, at 50.

Only want the cost of one conversion? See the Roth conversion tax table, by amount and income.

A Roth ladder — also called a Roth conversion ladder — is a way to reach retirement money before 59½ without paying the 10% early-withdrawal penalty. Each year you move a slice of a Traditional IRA or 401(k) into a Roth IRA and pay ordinary income tax on it that year. Five calendar years later, that specific slice becomes withdrawable penalty-free. Convert every year and, from year six onward, a rung matures annually — a repeating staircase of penalty-free income.

The reason it works for early retirees is that the tax is paid in the years when income is lowest. Someone who has stopped working has little or no W-2 income, so a conversion can fill the standard deduction and the 10% and 12% brackets at a blended rate near 10% — often far below the rate at which the money was originally deducted. The cost is patience: nothing converted today is reachable for five years, so years one to five need a separate bridge.

The ladder schedule, year by year

This is the whole mechanic. People often build a spreadsheet for it; the shape is always the same, and the calculator above fills it in with your own numbers.

The bridge is the part people underestimate. A ladder does not produce income for five years. You need five years of living costs from somewhere else before the first rung matures, which is why most FIRE plans pair the ladder with a taxable brokerage account or a 72(t)/SEPP schedule running alongside it.

How a Roth conversion ladder works, year by year

Here is the ladder with real numbers. A married couple retires at 45 in 2026, rolls $800,000 of 401(k) savings into a Traditional IRA, and converts $80,000 a year to a Roth IRA with no other income. Each conversion costs $5,240 in federal tax (6.6% effective, after the $32,200 standard deduction on the 2026 brackets), and at $80,000 it also stays under the $84,600 ACA subsidy cliff for a couple.

The first rung unlocks on 1 January 2031, when they are 50, and one $80,000 rung matures every year after that until 2040. The 10 conversions move $800,000 into the Roth for $52,400 in federal tax, 6.6% of the amount converted. The 5-year clock starts on 1 January of the conversion year, so a conversion made in December 2026 unlocks on the same day as one made that January.

What the table does not show is 2026 to 2030: nothing has matured yet, so those 5 years of spending, and the tax on each conversion, have to come from money outside the ladder.

Assumes no other income, married filing jointly, and the 2026 brackets held flat for every rung; ages are the age reached in that calendar year. Federal tax only. The calculator at the top re-runs this with your own numbers.

Roth conversion ladder rules for 2026

Eight rules decide how a ladder behaves. The numbers are the 2026 figures; the calculator above applies the bracket rows, and the rest are ceilings you set the conversion amount against.

Converting in your 60s also shrinks the pre-tax balance your forced withdrawals are worked out on later. To see how large they would be on what you leave in pre-tax accounts, run it through the RMD calculator, which applies the IRS Uniform Lifetime Table from 73 (75 if you were born in 1960 or later).

Before 65, the ACA cliff can matter more than the 12% bracket

The classic advice is to fill the 12% bracket: $133,000 a year for a married couple with no other income, costing $11,600 in federal tax. But an early-retired couple buying marketplace health insurance hits the ACA subsidy cliff at $84,600. The enhanced credits expired at the end of 2025, so for 2026 coverage there is no premium tax credit at all above 400% of the poverty line. That puts the bracket-filling conversion $48,400 over the line.

Converting $84,600 instead costs $5,792 in federal tax and keeps the credit, which for a couple in their early sixties is measured against an unsubsidized benchmark premium that can exceed $22,600 a year. Remember that ACA income also counts realized capital gains, including gains taxed at 0%. For a single filer the two ceilings nearly coincide: the cliff ($62,600) sits just under the 12% fill ($66,500).

Model your own premiums and headroom with the FIRE healthcare bridge calculator, then set the annual conversion above to the lower of the two ceilings.

How a Roth conversion ladder works for early retirement, step by step

1. Roll the 401(k) to a Traditional IRA after you leave the job. The rollover is not taxed.
2. Pick this year's ceiling: the 12% fill, the ACA cliff if you are under 65 on marketplace coverage, or the IRMAA threshold from 63. Use the lowest.
3. Convert up to that ceiling from the Traditional IRA to a Roth IRA, and pay the tax from taxable savings, not from the conversion.
4. Live on the bridge for five years: taxable brokerage, cash, Roth contributions (always withdrawable), or a 72(t) schedule.
5. From year six, withdraw the oldest matured rung each year while you keep converting, until 59½ when the clock no longer gates principal.

The three mistakes that cost real money

• Counting the five years from the conversion date. The clock starts on 1 January of the conversion year, not the day you converted. A conversion made in December 2026 matures on 1 January 2031 — the same day as one made the previous January.
• Converting straight from a 401(k). Roll to a Traditional IRA first (not a taxable event), then convert. In-plan 401(k)→Roth 401(k) conversions follow different rules.
• Spilling into the 22% bracket. The jump from 12% to 22% nearly doubles the marginal cost. Converting slightly less across more years almost always beats a large single conversion.

Roth conversion ladder vs 72(t) (SEPP) vs the Rule of 55

These are the two standard ways to reach IRA money before 59½ without the 10% penalty. A 72(t) schedule, which the tax code calls substantially equal periodic payments (IRC §72(t)(2)(A)(iv)), pays from the first year but locks the amount in. A Roth ladder keeps every year flexible but makes each conversion wait 5 years.

With the same $800,000 at 45, a 72(t) on the fixed amortization method, at the 6.11% maximum rate for a series starting December 2026, pays about $53,591 a year straight away. It then has to pay that same amount every year until 59½, 15 annual payments in all. The rate cap is the greater of 5% or 120% of the federal mid-term rate for either of the two months before payments begin.

A 72(t) schedule is set up on one account at a time, so the two can run together: a 72(t) on one IRA pays for the bridge years while the ladder builds in another. Size a schedule, and see what breaking it would cost, with the 72(t) calculator.

Where the Rule of 55 fits

The Rule of 55 is the third route, and the only one with no wait and no schedule. If you leave your job in or after the calendar year you turn 55 (50 for qualified public safety employees), withdrawals from that employer's 401(k) skip the 10% additional tax. Income tax still applies to each withdrawal.

• It covers only the plan of the employer you leave, never an IRA. Rolling that 401(k) into an IRA, the first step of a ladder, gives up the Rule of 55 on the money you move.
• Leaving work before the year you turn 55, as the couple in the example do at 45, means it never applies to that plan, even after you reach 55. That is when the ladder and 72(t) do the work.
• Leaving at 55 or later, you can draw on the old 401(k) straight away and still convert other IRA money in low-income years.

Check what a withdrawal from the old plan would cost with the Rule of 55 calculator.

Penalty exceptions: the 5-year rule and the 10% early-withdrawal tax

If you withdraw a converted amount within its 5-year period and you are under 59½, the 10% additional tax applies to the part of that conversion that was taxable when you converted it. Each conversion has its own 5-year period, starting on 1 January of the year you converted, and the penalty still applies even though the income tax was paid in an earlier year. It does not apply once you are 59½, or when one of the exceptions below covers the withdrawal (IRS Pub 590-B).

Which dollars come out of a Roth IRA first

1. Regular contributions, which are never taxed or penalized when withdrawn.
2. Conversions, oldest first. Within each year's conversions, the part that was taxed at conversion comes out before any part that was not.
3. Earnings, last of all.

This order is why a ladder works: until your matured rungs and your own contributions run out, a withdrawal never reaches a rung that is still inside its clock, or the earnings.

Exceptions to the 10% tax that matter for early retirees

A converted rung sits in a Roth IRA, so the IRA rules are the ones that apply to it. Some exceptions cover only IRAs and some only 401(k)-type plans.

An exception removes only the 10% additional tax. Income tax on a taxable distribution still applies.

Sources, read 7 October 2026: IRS Pub 590-B (five-year period on conversions, ordering rules) · IRS substantially equal periodic payments FAQ · IRS exceptions to tax on early distributions. 72(t) example: fixed amortization over the Single Life Table, payments at year end.

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Last updated 20 October 2026 · 2026 brackets and standard deductions: IRS Rev. Proc. 2025-32. Catch-up limits: IRS Notice 2025-67. IRMAA: CMS 2026 Medicare Parts A & B fact sheet. ACA cliff: HHS 2025 poverty guidelines. Five-year rule: Treas. Reg. §1.408A-6 Q&A 5. Withdrawal ordering: IRS Pub 590-B. Educational only, not tax advice — conversions are irreversible since the repeal of recharacterisation.