Model a year-by-year plan that moves a Traditional IRA into a Roth IRA using a fixed indexed annuity, with conversion taxes withheld from each year's free withdrawal allowance instead of paid out of pocket.
Assumptions and limitations. This calculator is a hypothetical illustration for educational purposes only. It does not represent any specific annuity product, and it is not a product illustration, an offer, or a recommendation. Index credits are assumed at a constant rate and are hypothetical; actual fixed indexed annuity credits vary by year, may be zero in some years, and are subject to caps, spreads, and participation rates. Premium bonuses are typically subject to vesting schedules and surrender charge periods. The free withdrawal modeled here assumes the greater of a percentage of account value or a percentage of original premium; provisions vary by product. Bracket calculations use 2026 federal tax brackets and the standard deduction, held constant in all years, including the additional standard deduction for age 65 and older where ages qualify ($2,050 single, $1,650 per married spouse), and exclude state income tax, the temporary senior deduction and its phase-out, and the net investment income tax. IRMAA checks use 2026 MAGI thresholds, held constant in all years; the calculator flags or limits threshold crossings but does not estimate surcharge dollar amounts. Medicare premiums in any year are based on MAGI from two years prior. The Other Income field is treated as MAGI and, less the standard deduction, as taxable income; individual circumstances such as tax-exempt interest add-backs and the taxable portion of Social Security will differ. Required minimum distributions are estimated using the IRS Uniform Lifetime Table, beginning at age 73 for those born before 1960 and age 75 for those born in 1960 or later, and are treated as taxable distributions, not conversions. The do-nothing comparison, when enabled, grows the unconverted IRA at the rate you enter with no premium bonus, taxes RMDs at your withholding rate, reinvests the after-tax proceeds in a taxable account whose growth is reduced 15% for annual tax drag and which is assumed to pass to heirs with a stepped-up basis, and discounts all remaining pre-tax IRA dollars at your heirs' single entered rate under the 10-year inherited IRA rule. After the 10-year surrender period, the conversion path continues to grow at the assumed annual credit rate. Both paths use flat annual growth, which ignores sequence-of-returns risk in both directions, and the comparison runs to the age you select (85, 90, or 95). The premium bonus is included on the conversion side, so the comparison reflects the full strategy, not taxes alone. Roth conversions are taxable events and cannot be undone. Consult a qualified tax professional before acting.
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