Roth conversion optimization can be impacted by most settings and data within your plan, but there are a few settings that can more directly and significantly impact the optimization results. Please review the following in the "Settings & Assumptions" screen of the Base Profile and/or other profile you are optimizing:
Retirement Accounts > Account Withdrawal Order
Roth-conversion optimization assumes Roth accounts will be withdrawn from first, last, or "proportionally" depending on this setting. Roth last is typically most advantageous, but you may want to consider other settings. You can also optimize this setting separately.
Retirement Accounts > Percent of Non-Annuitized Assets to Spend
If set to less than 100% and Roth accounts are drawn from last, the optimization may not find any improvement from increased Roth conversions as the optimization is focused on increasing lifetime spending. We suggest running a comparison with this value set at 100%.
Taxes > Unrealized Capital Gains and Unrealized Capital Gains Percentage
Roth conversions typically result in needing to pay more taxes, which may come from Regular Assets. If you need to sell certain assets (i.e., make withdrawals from regular assets), capital gains taxes may result. Be sure these settings accurately reflect the dollar amounts of unrealized capital gains in your asset balances and expected unrealized gains percentages going forward.
Taxes > Federal Tax Policy
Please review the options to be sure it is set to match your expectation for future tax policy. Learn more about the options here.