Indeed, doing an NPV analysis requires projecting returns AND marginal rates where comparing marginal rates alone will give you the answer.Present value is an interesting and educational idea in economics class, but useless in most cases because it requires you to predict the future. 3%, you say, but why? Since "Tax brackets and IRMAA tiers will look nothing like they do today", plus your pre-tax investment growth is entirely unpredictable, how does it help to calculate PV?
Roth conversions are not a precise mathematically-based decision. It is based on guessing what your tax rate will be in future. Like all investing decisions, it is a risk (except in some extreme cases).
PS The difference between 22% and 24% is small, and going up to 24% allows a much bigger conversion---if indeed such conversion is a good thing.
Statistics: Posted by murrays — Tue Sep 30, 2025 4:27 pm — Replies 7 — Views 1367