The Roth IRA Conversion Ladder: A FIRE Strategy

A Roth conversion ladder is a strategy used by early retirees to access money stored in traditional 401(k)s and IRAs before age 59.5.

The 5-Year Wait

You must wait five years after each conversion before you can withdraw the converted amount tax-free and penalty-free.

Lowering Your Tax Bill

Perform conversions during 'gap years' when your income is low to minimize the tax impact of the conversion.

Plan Ahead

Because of the five-year rule, you need to start your ladder at least five years before you need the money.