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How to Use a Roth IRA Ladder in Early Retirement
Lucas and Luna walk through the mechanics of a Roth IRA conversion ladder, explaining how early retirees can access retirement funds before age 59½ without paying the 10% early withdrawal penalty. Using a concrete example of someone retiring at 45 with a traditional IRA balance of $800,000, they break down the five-year waiting period, the tax implications of each rung, and how to plan conversions during low-income years to minimize taxes. The episode also covers common pitfalls like the pro-rata rule for after-tax contributions and the impact of large conversions on ACA subsidies. Listeners…
The skinny
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