Convert $60k/yr ages 45-64
Convert $60k/yr ages 45-64 ends $506,423 ahead of current plan (no changes) after tax, but pays $16,922 more tax over a lifetime. The two measures disagree.
- Which of those matters depends on what you are optimising for — ending wealth, or tax paid along the way.
- All of it under the assumptions listed below, which the reader can change.
What the tax change is made of
- Tax on dividends, interest and portfolio gains: +$44,548
- Federal income tax: −$27,626
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)$564,272
Terminal after-tax wealth$7,551,986
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 | $60,000 | $0 | $4,609 | $3,410,754 |
| 8 | 46 | $0 | $60,000 | $0 | $4,544 | $3,479,131 |
| 9 | 47 | $0 | $60,000 | $0 | $4,477 | $3,548,772 |
| 10 | 48 | $0 | $60,000 | $0 | $4,409 | $3,619,706 |
| 11 | 49 | $0 | $60,000 | $0 | $4,340 | $3,691,962 |
| 12 | 50 | $0 | $60,000 | $0 | $4,268 | $3,765,570 |
| 13 | 51 | $0 | $60,000 | $0 | $4,195 | $3,840,560 |
| 14 | 52 | $0 | $60,000 | $0 | $4,120 | $3,916,966 |
| 15 | 53 | $0 | $60,000 | $0 | $4,043 | $3,994,819 |
| 16 | 54 | $0 | $60,000 | $0 | $3,964 | $4,074,155 |
| 17 | 55 | $0 | $60,000 | $0 | $3,883 | $4,155,009 |
| 18 | 56 | $0 | $60,000 | $0 | $3,800 | $4,237,418 |
| 19 | 57 | $0 | $60,000 | $0 | $3,715 | $4,321,419 |
| 20 | 58 | $0 | $60,000 | $0 | $3,628 | $4,407,052 |
| 21 | 59 | $0 | $60,000 | $0 | $3,539 | $4,494,359 |
| 22 | 60 | $0 | $60,000 | $0 | $3,447 | $4,583,381 |
| 23 | 61 | $0 | $60,000 | $0 | $3,353 | $4,674,164 |
| 24 | 62 | $0 | $60,000 | $0 | $3,257 | $4,766,754 |
| 25 | 63 | $0 | $60,000 | $0 | $3,158 | $4,861,199 |
| 26 | 64 | $0 | $60,000 | $0 | $3,057 | $4,957,549 |
| 27 | 65 | $0 | $0 | $0 | $0 | $5,061,507 |
| 28 | 66 | $0 | $0 | $0 | $0 | $5,167,164 |
| 29 | 67 | $0 | $0 | $0 | $0 | $5,274,522 |
| 30 | 68 | $0 | $0 | $0 | $0 | $5,383,582 |
| 31 | 69 | $0 | $0 | $0 | $0 | $5,494,343 |
| 32 | 70 | $0 | $0 | $0 | $0 | $5,606,801 |
| 33 | 71 | $0 | $0 | $0 | $0 | $5,720,951 |
| 34 | 72 | $0 | $0 | $0 | $0 | $5,836,787 |
| 35 | 73 | $0 | $0 | $71,194 | $10,642 | $5,943,022 |
| 36 | 74 | $0 | $0 | $72,259 | $20,489 | $6,039,867 |
| 37 | 75 | $0 | $0 | $70,505 | $21,002 | $6,136,548 |
| 38 | 76 | $0 | $0 | $68,178 | $21,527 | $6,232,930 |
| 39 | 77 | $0 | $0 | $64,898 | $22,065 | $6,328,869 |