Comments on: How a Conversion Ladder Can Help You Retire Early

By: tradinganinvest

tradinganinvest — Thu, 10 Mar 2016 04:56:20 +0000

That’s a great point. I will try it for myself.

By: Simply Financially Free

Simply Financially Free — Fri, 12 Feb 2016 14:29:46 +0000

Great post about the concept but you are missing important part of this: taxes. If you need $30,000 per year you would need to convert more than $30,000 as this full amount would be taxed. If you were to assume a 15% tax rate and no state taxes you would actually need to convert $35,294. Of course it would be a good idea to run this by an accountant make sure you are getting the numbers right but just keep in mind that converting $30,000 doesn’t net $30,000 after taxes unless you have some real magic going on tax-wise.

By: moderatemuse

moderatemuse — Sun, 07 Feb 2016 22:12:11 +0000

Charlie_15 From what I understand, the conversion ladder only works if you are transferring your money from a traditional IRA to a Roth IRA. You have to pay the tax on the amount converted, but I’m not sure if it’s considered income tax or falls under a different tax. I would have to look deeper into an answer for you question.

David, do you know the answer to this? Are you able to withdraw the invested returns as well or only the amount converted?

By: moderatemuse

moderatemuse — Sun, 07 Feb 2016 22:09:38 +0000

Laura Beth @ How To Get Rich Slowly It’s a shame that there isn’t more information readily available about this concept, but I’m assuming it’s due to the fact that it’s still a fairly new financial method. Like John said, however, I’m sure we’ll see and hear more in the coming years as more people start to utilize this process or the government decides to set new regualations.

By: moderatemuse

moderatemuse — Sun, 07 Feb 2016 22:05:26 +0000

Andrew LivingRichCheaply At least you know your options, though. It’s best to go into retirement (early or not) knowing the different possibilities that you might have to help fund your living expenses.

By: moderatemuse

moderatemuse — Sun, 07 Feb 2016 22:03:51 +0000

Harmony@CreatingMyKaleidoscope I’m glad you found the article helpful!

By: moderatemuse

moderatemuse — Sun, 07 Feb 2016 22:03:28 +0000

FrugalRules I wouldn’t be surprised if they did. Whenever anything financial gains in popularity they clamp down on the rules. Very much like peer to peer lending will continue to see changes.