Convert $100k/yr for five years (ages 60-64)
Convert $100k/yr for five years (ages 60-64) ends $56,973 behind no conversions, after tax.
- Lifetime tax, in today's dollars: $55,843 more.
- All of it under the assumptions listed below, which the reader can change.
What the tax change is made of
- Federal income tax: +$41,272
- Tax on dividends, interest and portfolio gains: +$14,571
These add back to the total change; they are the same taxes the projection sums into the headline, discounted the same way.
Not financial or tax advice.
Lifetime tax (present value)$208,758
Terminal after-tax wealth$2,747,225
Years in IRMAA0
What this assumes
Every figure below depends on these. Change one and the answer changes.
- Horizon
- 30 yearsHow many years the projection runs.
- Nominal return
- 5%Assumed annual growth before inflation.
- Inflation
- 2.5%Grows spending, and indexes brackets between published years.
- Discount rate
- 3%Used to present-value lifetime tax — the headline metric.
- Future tax law
- Current law continuesLeft on current law, the projection assumes today’s brackets last the whole horizon — itself a forecast, not a neutral choice.
Other assumptions (4)
- Dividend yield
- 1.2%
- Interest yield
- 0.8%
- Business cash return
- 2%
- Income growth
- 0%
Year by year
| Year | Age | Ordinary income | Conversion | RMD | Federal tax | Net worth |
|---|---|---|---|---|---|---|
| 0 | 60 | $40,000 | $100,000 | $0 | $13,140 | $1,935,310 |
| 1 | 61 | $40,000 | $100,000 | $0 | $12,699 | $1,970,721 |
| 2 | 62 | $40,000 | $100,000 | $0 | $12,246 | $2,006,211 |
| 3 | 63 | $40,000 | $100,000 | $0 | $12,105 | $2,041,554 |
| 4 | 64 | $40,000 | $100,000 | $0 | $11,987 | $2,077,131 |
| 5 | 65 | $40,000 | $0 | $0 | $2,111 | $2,125,732 |
| 6 | 66 | $40,000 | $0 | $0 | $6,905 | $2,169,354 |
| 7 | 67 | $40,000 | $0 | $0 | $7,078 | $2,212,540 |
| 8 | 68 | $40,000 | $0 | $0 | $7,255 | $2,255,203 |
| 9 | 69 | $40,000 | $0 | $0 | $7,436 | $2,297,251 |
| 10 | 70 | $40,000 | $0 | $0 | $7,622 | $2,338,583 |
| 11 | 71 | $40,000 | $0 | $0 | $7,813 | $2,379,093 |
| 12 | 72 | $40,000 | $0 | $0 | $8,008 | $2,418,668 |
| 13 | 73 | $40,000 | $0 | $51,807 | $8,208 | $2,457,188 |
| 14 | 74 | $40,000 | $0 | $53,299 | $8,414 | $2,494,523 |
| 15 | 75 | $40,000 | $0 | $54,535 | $8,624 | $2,530,537 |
| 16 | 76 | $40,000 | $0 | $55,693 | $8,840 | $2,565,084 |
| 17 | 77 | $40,000 | $0 | $56,504 | $9,061 | $2,598,009 |
| 18 | 78 | $40,000 | $0 | $57,423 | $9,287 | $2,629,146 |
| 19 | 79 | $40,000 | $0 | $58,185 | $9,519 | $2,658,322 |
| 20 | 80 | $40,000 | $0 | $58,753 | $9,757 | $2,685,349 |
| 21 | 81 | $40,000 | $0 | $58,777 | $10,001 | $2,710,030 |
| 22 | 82 | $40,000 | $0 | $58,794 | $10,251 | $2,732,156 |
| 23 | 83 | $40,000 | $0 | $58,119 | $10,507 | $2,751,504 |
| 24 | 84 | $40,000 | $0 | $57,314 | $10,770 | $2,767,838 |
| 25 | 85 | $40,000 | $0 | $55,611 | $11,039 | $2,780,907 |
| 26 | 86 | $40,000 | $0 | $53,220 | $11,315 | $2,790,446 |
| 27 | 87 | $40,000 | $0 | $49,992 | $11,598 | $2,796,175 |
| 28 | 88 | $40,000 | $0 | $45,408 | $11,888 | $2,797,796 |
| 29 | 89 | $40,000 | $0 | $39,923 | $12,185 | $2,794,993 |