Tax Playbook · Big life moves
Roth conversion ladders
Each year you move a slice of your pre-tax IRA or 401(k) into a Roth and pay tax on it that year — for example, a $40,000 conversion in 2026. After five years you can pull that slice back out tax-free and penalty-free, even before age 59½. Every conversion gets its own five-year clock, so converting yearly builds a pipeline: the 2026 slice becomes spendable in 2031, the 2027 slice in 2032, and so on.
Good for: Early retirees who need money before age 59½.
Learn the basics
Recent articles & guides
- UNVERIFIED: Schwab: What to know about the five-year rule for Roths
- Investopedia: How the Roth conversion ladder works
- SmartAsset: Early retirement with a Roth ladder
- Moneywise: Is the Roth IRA conversion ladder a tax hack?
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Educational summary, not tax advice. Limits and rules change — confirm current law with your tax adviser.