Convert $35k/yr instead
Convert $35k/yr instead ends $926,125 ahead of convert nothing, after tax.
- Lifetime tax, in today's dollars: $52,932 less.
- All of it under the assumptions listed below, which the reader can change.
What the tax change is made of
- Federal income tax: −$51,526
- Tax on dividends, interest and portfolio gains: −$1,406
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)$494,418
Terminal after-tax wealth$7,971,688
Years in IRMAA0
What this assumes
Every figure below depends on these. Change one and the answer changes.
- Horizon
- 52 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 | 38 | $250,000 | $0 | $0 | $51,304 | $1,863,733 |
| 1 | 39 | $250,000 | $0 | $0 | $50,587 | $2,086,212 |
| 2 | 40 | $250,000 | $0 | $0 | $49,851 | $2,317,814 |
| 3 | 41 | $250,000 | $0 | $0 | $49,098 | $2,558,934 |
| 4 | 42 | $250,000 | $0 | $0 | $48,325 | $2,809,983 |
| 5 | 43 | $250,000 | $0 | $0 | $47,533 | $3,071,393 |
| 6 | 44 | $250,000 | $0 | $0 | $46,935 | $3,343,613 |
| 7 | 45 | $0 | $35,000 | $0 | $1,609 | $3,418,052 |
| 8 | 46 | $0 | $35,000 | $0 | $1,544 | $3,494,082 |
| 9 | 47 | $0 | $35,000 | $0 | $1,489 | $3,571,746 |
| 10 | 48 | $0 | $35,000 | $0 | $1,439 | $3,651,087 |
| 11 | 49 | $0 | $35,000 | $0 | $1,388 | $3,732,152 |
| 12 | 50 | $0 | $35,000 | $0 | $1,335 | $3,814,987 |
| 13 | 51 | $0 | $35,000 | $0 | $1,281 | $3,899,643 |
| 14 | 52 | $0 | $35,000 | $0 | $1,225 | $3,986,170 |
| 15 | 53 | $0 | $35,000 | $0 | $1,168 | $4,074,622 |
| 16 | 54 | $0 | $35,000 | $0 | $1,110 | $4,165,054 |
| 17 | 55 | $0 | $35,000 | $0 | $1,050 | $4,257,523 |
| 18 | 56 | $0 | $35,000 | $0 | $989 | $4,352,088 |
| 19 | 57 | $0 | $35,000 | $0 | $926 | $4,448,813 |
| 20 | 58 | $0 | $35,000 | $0 | $862 | $4,547,761 |
| 21 | 59 | $0 | $35,000 | $0 | $796 | $4,648,981 |
| 22 | 60 | $0 | $35,000 | $0 | $728 | $4,752,526 |
| 23 | 61 | $0 | $35,000 | $0 | $659 | $4,858,466 |
| 24 | 62 | $0 | $35,000 | $0 | $588 | $4,966,702 |
| 25 | 63 | $0 | $35,000 | $0 | $515 | $5,077,156 |
| 26 | 64 | $0 | $35,000 | $0 | $441 | $5,189,864 |
| 27 | 65 | $0 | $35,000 | $0 | $364 | $5,304,861 |
| 28 | 66 | $0 | $35,000 | $0 | $286 | $5,422,182 |
| 29 | 67 | $0 | $35,000 | $0 | $205 | $5,541,861 |
| 30 | 68 | $0 | $35,000 | $0 | $123 | $5,663,935 |
| 31 | 69 | $0 | $35,000 | $0 | $38 | $5,788,437 |
| 32 | 70 | $0 | $35,000 | $0 | $0 | $5,915,354 |
| 33 | 71 | $0 | $35,000 | $0 | $0 | $6,044,673 |
| 34 | 72 | $0 | $35,000 | $0 | $0 | $6,176,423 |
| 35 | 73 | $0 | $0 | $106,344 | $7,588 | $6,302,527 |
| 36 | 74 | $0 | $0 | $111,661 | $8,096 | $6,430,092 |
| 37 | 75 | $0 | $0 | $116,768 | $8,577 | $6,559,116 |
| 38 | 76 | $0 | $0 | $122,089 | $9,079 | $6,689,538 |
| 39 | 77 | $0 | $0 | $127,074 | $9,538 | $6,821,361 |