This alternative plan illustrates the impact of a Roth Conversion. Some Tax-deferred retirement assets are converted to a Roth. It should be compared to the Base Plan.
Shown below is the Roth conversion set up in the alternative plan. MaxiFi does not optimize to show you the amount or the period of years to use for Roth conversion. But some experimenting will quickly guide you in the right direction with these two variables.
The image below shows the results of this Roth conversion. There is a present value lifetime advantage of $15,016 that entails an annual advantage over the life of the plan of $493. This advantage, as shown in the changes, is attributable in part to lower federal and state taxes.
