Use the Roth IRA Conversion Optimizer to calculate the optimum amount to convert in a single year. Using the optimized percentage to convert gives the highest Net After-Tax Assets for the target year entered on the Roth IRA Conversion Optimizer window. The Roth IRA Conversion Optimizer works best when calculating income tax from adjusted growth income instead of calculating income tax using entered rates.
To find the optimum amount to convert, follow these easy steps:
- On the Quick Calcs menu, click Roth IRA Conversion Optimizer.
- Select the Alternative for which you want to find the optimum percent to convert.
- Review the Assumptions. The Assumptions list the life expectancies of the owner and the beneficiary.
- In the Conversion Year box, enter the conversion year.
- In the Year for Maximum Net After Tax Assets box, enter the target year of your analysis.
- Select 1% for the Optimization Precision (only select a lower precision if your computer is taking too long to do the optimization).
- Click the Optimize button. The program displays the Optimum Conversion percentage at the top of the graph.
- To convert the optimum percentage, click the Use button.