A worked example
A two-year income gap
Dana, 55, single, earning $120k with $500k pre-tax and $200k in a brokerage account, and a layoff on the horizon.
“What if I'm out of work for two years starting next year? And what does converting $40k a year during that gap look like?”
What the projection shows
Which accounts cover the spending shortfall during the gap years, how far the marginal bracket falls in those years, and what converting during the gap does to lifetime tax compared with just riding it out.
What the projection also found
Nothing was missing from the inputs. These follow directly from the numbers above, under the assumptions this example uses.
- The $40,000 converted this year pushes income past the top of the 0% band, so $16,403 of gains and dividends that would have been tax-free are now taxed $162. Your ordinary bracket didn't change, so a bracket table wouldn't show this.
The planner opens with this household already filled in. Change the balances, the ages or the assumptions to match your own situation, then run it.
A projection based on stated assumptions. Not financial or tax advice.