Roth Conversion Ladder
A strategy that moves retirement money to a Roth account over years to access it early with low tax.
A Roth conversion ladder involves converting money from a pre-tax account to a Roth account in a series of yearly steps. After a waiting period, converted amounts can be withdrawn without penalty, giving early retirees a tax-efficient way to tap retirement funds before the standard age.
Examples
- Early retirees convert a set amount each year to build a ladder of penalty-free withdrawals.