Roth Conversion Ladder — seasoning queue + bridge cold-start gate
Every ladder calculator can queue conversions for five years. Almost none ask the question that actually sinks early retirees: does the bridge fund survive the cold start? This one runs your first five years across every historical start sequence since 1928 (a 2000- or 2008-style sequence, not a smooth 6%), grosses up the real cost of paying conversion tax from IRA withholding before 59½, and shows the §72(t) SEPP lane next to it — with every output as a range.
Total conversion cost range
tax + penalties, p5 · median · p95Coral = 5th percentile, aqua = median, mint = 95th percentile of total tax + penalties across all start sequences. The indigo band is the tax-only share — daylight between band and whiskers is penalties (withholding and/or emergency early-IRA taps).
§72(t) substantially equal periodic payments are the main alternative to a ladder: penalty-free ordinary-income withdrawals that start immediately — but the schedule locks for the longer of 5 years or until 59½, and breaking it triggers the 10% additional tax retroactively with interest.
Year-by-year accessible-money timeline ›
| Plan year | Convert (plan $) | Rung unlocking (plan $) | Accessible Roth pool (median, real) | Bridge balance p5 / median / p95 (real) |
|---|---|---|---|---|
| Run the ladder to fill the timeline. | ||||
"Rung unlocking" is the plan-dollar principal whose 5-taxable-year clock (started Jan 1 of its conversion year) expires that year. The accessible-pool column is the median REAL value across start sequences — seasoned principal is frozen in nominal dollars while it waits, so realized inflation eats at it; that decay is modeled, not ignored.
Show the math ›
Assumptions & sources ›
| Assumption | Value | Source · asOf |
|---|---|---|
| Ordinary brackets + standard deduction | 2026, single / MFJ | IRS Rev. Proc. 2025-32 (OBBBA-amended) · asOf 2025-10 · future brackets assumed CPI-indexed, so the sim runs in real dollars |
| Per-rung seasoning | 5 taxable years, clock starts Jan 1 | IRC §408A(d)(3)(F); Treas. Reg. §1.408A-6 Q&A-5 · a December conversion is accessible after ~4 yrs + 1 day |
| Early-distribution additional tax | 10% before 59½ | IRC §72(t)(1) · applied to withheld conversion tax and to emergency IRA taps |
| §72(t) SEPP band | RMD method … amortization @ 5% | IRS Notice 2022-6 (rate ≤ max(5%, 1.2× mid-term AFR)); Single Life Table, Treas. Reg. §1.401(a)(9)-9(b) · asOf 2022-01 |
| Market series (bridge + IRA) | S&P 500 TR / 3-mo T-bill, 1928–2025 | Damodaran (NYU Stern) · asOf 2026-01 · rolling windows, real returns via CPI-U (BLS) |
| Not modeled (disclosed) | state tax · ACA subsidy cliff · IRMAA · LTCG on bridge sales · Roth earnings spending | conversions raise MAGI, which can cut ACA premium subsidies sharply — check that constraint before sizing rungs; bridge withdrawals are treated as basis (slightly optimistic); locked Roth earnings are never spent (conservative) |
The simulation runs in real (today's) dollars: spending and conversions hold constant purchasing power, brackets are assumed to index with CPI (as they do by statute), and each historical window supplies its own realized real returns and inflation. Estimates for planning illustration — not tax, legal, or investment advice.
Related
- Guide: the 5-year rule
Why every rung has its own clock, and why December beats January.
- Safe withdrawal rate
Three withdrawal strategies stress-tested over the same 1928–2025 windows.
- How long will my money last
Depletion horizons as ranges, not single points.