Converting 401k $ to a Roth IRA?

[Anonymous]

Anonymous wrote:Op here. I'd have to liquidate some of a separate brokerage account to cover the taxes, but maybe it's worth it in the long run to get the money into the Roth where it could grow tax free? Anybody know of a calculator that would allow me to compare different scenarios?

This is the way to do it--sell something like a brokerage account that is subject to lower long term capital gains taxes and use those proceeds to cover the taxes on the conversion. You didn't say how much is in your brokerage, but the amount puts a ceiling on how much you can convert because that is as much as you have available to pay the taxes.

It may be worth consulting with a tax CPA to do the calculation. I did this back in 2021 and overestimated taxes by $40,000 and so deprived myself of converting even more. You could get fancier with tax brackets etc, and decide to convert half now and half next years or stagger it over 2025, 2026, and 2027. I personally just wanted it over and did it all in one big transaction. There was a threat of higher taxes for 2022 as I recall, so that factored into it as well.