How do I run Roth conversion scenarios in PortfolioPilot?
PortfolioPilot's Retirement Planner includes a scenario modeling tool that allows you to simulate the impact of Roth conversions on your long-term financial picture. Here's how to use it:
- Go to the Retirement Planner
- Go to the "Scenarios settings" section
- Add a new payment and select "Roth Conversion" as the event type
- Enter the conversion amount, the year(s) of conversion, and the wealth impact
- The scenario will run to see the projected impact on your retirement income, tax burden, and net worth over time.
What the tool shows you:
- How a Roth conversion affects your projected retirement balance
- The short-term tax cost vs. the long-term tax-free growth benefit
- Side-by-side comparison of converting vs. not converting
Tip: Roth conversions are most beneficial in lower-income years (e.g. early retirement, before Social Security kicks in, or years with large deductions). Use the scenario tool to find the optimal conversion amount and timing for your situation.
Note: PortfolioPilot provides analysis tools to help inform your decision, but we recommend consulting a tax professional before executing a Roth conversion, as the tax implications can be significant.
