Roth Conversion Math for Retirees With a Pension and 401(k)

The article examines whether a couple retiring at 65 with $420,000 in a 401(k) and a $60,000 pension should have made Roth conversions before required minimum distributions begin at 73. It says that when current and future tax rates match, converting now or waiting produces the same after-tax result, about $233,490 on $100,000 over 20 years. A $60,000 pension plus $47,500 in deductions leaves room to convert up to $88,300 annually at the 12% rate, enough to clear the 401(k) in eight years, though widowhood can shrink deductions and push a survivor into the 22% bracket.

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The scenario involves a 65-year-old couple with $420,000 in a traditional 401(k) and a $60,000 pension. Required minimum distributions start at 73, leaving eight years. For 2026, their joint deductions total $47,500, making only $12,500 of pension income taxable. That leaves $88,300 of 12% bracket room annually.

At a 5% return, converting $88,300 yearly would leave roughly $23,700 after five years. A $100,000 comparison over 20 years yields equal