Mastering Roth Conversions: The Key to Unlock Financial Freedom for Your Clients

This webinar explains not just how to use the tool, but why Roth conversions are advantageous for clients — from tax-free growth and no RMDs to MAGI management and heir benefits. Includes two worked scenarios (a $250K and a $1M traditional IRA), a demonstration of the Optimize feature, and guidance on pairing the Roth Simulator with the Tax Projector for a complete picture.

What You’ll Learn

• The key benefits of Roth IRAs vs Traditional IRAs — tax-free distributions, no RMDs, no MAGI impact, and advantages for both clients and their heirs
• Page 1 — Assumptions: how to configure filing status, IRA balances, investment return rates, supplemental withdrawals, pre- and post-retirement income, growth rates, the 2026 TCJA sunset toggle, and the outside account tax payment feature
• Page 2 — Conversion Modelling: how to set conversion amounts, number of years, and kickoff age across up to three side-by-side scenarios
• The Optimize feature: how the tool runs thousands of scenarios to find the optimal conversion for Client Max Benefit, Heirs Max Benefit, or Minimum Taxes
• The Maximize button: how to fill up to the top of the client’s current tax bracket in one click without pushing into the next bracket
• Page 3 — Results: reading the output table, understanding the dynamic graph columns (portfolio balance, taxes paid, Medicare premiums, withdrawal amounts), and downloading the PDF report
• Pairing the Roth Simulator with the Tax Projector — using both tools together for big-picture analysis plus detailed year-by-year tax impact
• What’s coming next — upcoming enhancements including higher bracket targeting, variable annual conversion amounts, full IRA depletion with growth, and custom scenario naming

Chapters

Click a timestamp to jump to that section of the webinar.

1. 0:00 — Welcome & Poll — How Often Do You Use the Roth Simulator?
2. 1:00 — Agenda Overview
3. 3:13 — Traditional IRA vs Roth IRA — Key Differences
4. 4:11 — Key Benefits of the Roth IRA
5. 5:57 — Navigating to the Roth Conversion Simulator
6. 6:20 — Page 1: Assumptions — Inputs & System Defaults
7. 9:42 — Tax Treatment Toggles: TCJA Sunset, Outside Account, Heir Tax Rate
8. 11:07 — Page 2: Modelling Conversions — Scenarios, Optimize & Maximize
9. 14:28 — Edit Income Projection — Year-by-Year Overrides
10. 15:24 — Scenario 1 Walkthrough: $250K Traditional IRA, $100K Conversion
11. 18:33 — Page 3: Results — Output Table, Dynamic Graph & PDF Report
12. 24:19 — Q&A Break — State Taxes, Medicare, Optimization Logic
13. 29:04 — Scenario 2 Walkthrough: $1M Traditional IRA with Supplemental Withdrawals
14. 33:27 — Medicare Premiums & Withdrawal Columns Explained
15. 35:59 — Using the Tax Projector Alongside the Roth Simulator
16. 38:29 — What’s Coming Next — Upcoming Enhancements
17. 41:09 — Wrap-Up, Contact Info & Open Q&A

Key Takeaways

The Three Pages Tell a Complete Story

The Roth Simulator is structured as three sequential screens: Assumptions (client profile, IRA balances, income, tax settings), Conversion Modelling (amounts, years, kickoff age, with up to three scenarios), and Results (output table with dynamic graphs and downloadable PDF). Each page feeds into the next, so accuracy on page one — especially the retirement taxable income field — is critical. That income field should reflect only the taxable portion of all retirement income sources (e.g., 85% of Social Security, not the gross amount), and it should not include RMDs, which the tool calculates automatically.

Optimize Runs Thousands of Scenarios So You Don’t Have To

The Optimize feature randomises three variables — conversion amount, number of conversion years, and start age — across thousands of combinations to find the mathematically optimal answer for one of three goals: maximising client portfolio balance at end of life, maximising the amount passed to heirs, or minimising total lifetime taxes. These three goals can produce very different strategies. In the webinar example, optimising for client benefit suggested $90,000 over 11 years, while optimising for heirs suggested $100,000 over 10 years. The minimum tax scenario produced the lowest portfolio balance but the least tax paid.

The Outside Account Toggle Changes the Maths Significantly

A recent enhancement allows you to toggle on paying conversion taxes from an outside (non-IRA) account rather than from the conversion itself. When this is turned on, the tool takes the tax bill, grows it at the investment rate of return (representing opportunity cost), and reduces the total after-tax portfolio balance accordingly. This is the more realistic scenario for most clients and is the recommended setting. Previously, taxes were reported but not deducted from the portfolio — this has now been corrected.

Maximize Fills to the Top of the Current Bracket — Not Beyond

The Maximize button is separate from Optimize. It calculates the exact conversion amount needed to reach the top of whatever federal tax bracket the client is currently in, without crossing into the next bracket. In the webinar example, a client in the 24% bracket could convert exactly $75,000 to stay within that bracket. One dollar more would push them to 32%. This is particularly useful for bracket management conversations with clients who are psychologically sensitive to bracket changes, even when the marginal impact is small.

Use the Roth Simulator and Tax Projector as a Pair

The Roth Simulator answers the big-picture question: over a lifetime, is a Roth conversion beneficial and by how much? The Tax Projector answers the year-by-year question: if I convert this amount this year, what is the exact tax impact, including bracket changes, MAGI thresholds, and IRMAA implications? Dylan recommends using both together — determine the strategy in the Roth Simulator, then validate the current-year impact in the Tax Projector by entering the conversion amount in the Taxable IRA Distribution line.

Screen-by-Screen Quick Reference

A summary of every input and output across the three simulator pages.

What’s Coming Next

Dylan shared several upcoming enhancements to the Roth Simulator:

• Maximize to a higher bracket — choose to fill up to the 24% or 32% bracket even if the client is currently in the 22%
• Variable annual conversion amounts — convert $50K one year and $25K the next, rather than equal amounts across all years
• Full IRA conversion including growth — deplete the entire traditional IRA even when conversions start in a future year and the balance has grown
• Custom scenario names — label each scenario (e.g., “Convert at 70” or “$100K over 5 years”) for clearer PDF reports
• RMD display in the results table — show specific RMD amounts per year in the output for clearer client conversations
• Selectable graph on the PDF report — choose which dynamic graph (e.g., Taxes Paid) appears on the downloaded report instead of defaulting to total portfolio balance

Tips & Best Practices from This Webinar

Frequently Asked Questions from This Webinar

Does the simulator consider the opportunity cost of paying taxes from an outside account?

Yes. When the outside account toggle is turned on, the tool takes the tax bill, grows it at the investment rate of return, and reduces the total after-tax portfolio balance by that amount.

Are state taxes included?

Not currently. State taxes are not factored into the simulator. This is a known request and is on the product team’s radar.

Are standard deductions applied?

Yes. Standard deductions are factored into the income tax bracket calculations. You can verify this on the results page.

What’s the difference between Client Max Benefit and Heirs Max Benefit?

Client Max Benefit optimises for the largest ending portfolio balance during the client’s lifetime. Heirs Max Benefit optimises for the largest after-tax amount passed to heirs at death. The difference comes from the heir tax rate you set on page one vs the client’s marginal rate.

Can I enter an existing taxable account balance?

Not currently. The taxable account in the simulator is a hypothetical account that starts at zero and only catches leftover RMDs. Adding an existing balance is a feature request under consideration.

Does the tool inflate IRMAA annually?

Dylan took this back to the product team for a definitive answer. Contact Dylan or Josh for an update on this.