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#1 |
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Dryer sheet wannabe
![]() ![]() Join Date: Jan 2006
Posts: 21
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Roth Conversion Tax
I think maybe I found a way to use Firecalc to calculate the tax effect of my 10-year Roth conversion program at the top of the 15% tax bracket:
On the first page ("How Much Will You Spend?"), I entered the target amount of my conversion tax payments as an "increase" of my withdrawal starting this year (2006). I check the inflation-adjusted checkbox in order to keep up with the future 15% bracket creep. Then I enter the same number (the target amount of my conversion tax payments) as a "decrease" in my withddrawal starting in the year of 2016 (10 years later). And I ask Firecalc for my results in terms of "how much (I) spend each year." Question: should I check the inflation-adjusted checkbox for this "decrease?" It makes a significant difference in the results if this "increase" and "decrease aren't both inflation-adjusted (or not). So should I always keep this withdrawal "increase" and "decrease" the same in this regard, that is, they both should be inflation-adjusted or both not be inflation-adjusted? This is an important distinction, I think. Does the above method properly use Firecalc to simulate the effect of the 10 years of tax payments caused by my proposed 10-year Roth conversion plan? Am I making any mistakes here? I really appreciate any comments and suggestions on how to use Firecalc as accurately as possible for the purpose as set forth above. Thanks a lot, everyone, for all your help! |
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#2 |
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Recycles dryer sheets
![]() ![]() ![]() ![]() Join Date: Jan 2007
Posts: 124
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Re: Roth Conversion Tax
Did you ever figure this one out? I'd think your scenario would calculate the taxes - but how do you indicate that those withdrawal dollars are then in a Roth account (not being spent) and generating dollars themselves?
But I'm just learning FireCalc myself. |
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