How Does the Pro-Rata Rule Affect a Roth Conversion If I Have After-Tax Money in My IRA?

You have $900,000 in traditional IRAs.

Most of it came from deductible contributions, rollovers, and years of growth.

But not all of it.

Years ago, your income was too high to deduct some IRA contributions.

You made the contributions anyway.

You already paid income tax on that money.

Now you’re considering a Roth conversion and you’re thinking:

“If I already paid tax on part of this IRA, why would I pay tax on it again?”

You generally shouldn’t pay federal income tax twice on properly documented IRA basis.

But there’s another problem.

You usually can’t just point to the after-tax dollars inside your traditional IRA and say:

“Convert those dollars first.”

That’s where the pro-rata rule enters the picture.

Quick Answer: What Is the Roth Conversion Pro-Rata Rule?

If you have both pre-tax and after-tax amounts in applicable traditional IRA accounts, federal tax rules generally treat distributions and Roth conversions as containing a proportional share of both.

Think of it like mixing cream into coffee.

Once it’s mixed together, you can’t pour out only the cream.

Your after-tax IRA basis and pre-tax IRA money are generally considered together when determining the taxable portion of the transaction.

That means a $100,000 Roth conversion isn’t automatically $100,000 taxable, but it also isn’t automatically $100,000 tax-free just because you have $100,000 of basis somewhere in your IRAs.

What Is IRA Basis?

IRA basis generally represents money in your traditional IRA that has already been subject to federal income tax.

A common source is nondeductible traditional IRA contributions.

Suppose years ago you contributed $7,000 to a traditional IRA but didn’t receive a federal income-tax deduction for the contribution.

That $7,000 may become part of your IRA basis when properly reported.

Over several years, maybe you accumulate $50,000 of basis.

That matters because you generally don’t want to pay federal income tax on the same $50,000 again when it eventually comes out.

How Do You Know If You Have IRA Basis?

This is where paperwork becomes extremely important.

One of the first places your tax professional may look is your prior Form 8606 filings.

Form 8606 is generally used to report nondeductible traditional IRA contributions and track basis for applicable IRA transactions.

If you’ve been making nondeductible contributions for years, that form can be critical.

“I remember paying tax on that money” isn’t the same as having clean documentation showing your IRA basis.

Example: $1 Million in IRAs With $100,000 of After-Tax Basis

Let’s make this simple.

Suppose your applicable IRA balances total $1 million for purposes of the calculation.

Of that:

• $900,000 represents pre-tax amounts
• $100,000 represents after-tax basis

So approximately 10% of the IRA value in this simplified example represents basis.

Now suppose you convert $100,000.

You might think:

“Perfect. I’ll just convert my $100,000 of after-tax money.”

That’s generally not how the calculation works.

In a simplified example where the pro-rata percentage is 10%, approximately 10% of the conversion may be treated as a recovery of basis and approximately 90% may be taxable.

The actual tax calculation depends on the applicable year-end account values, distributions, conversions, basis, and federal tax rules.

The after-tax dollars don’t normally sit inside the IRA with a name tag on them.

Why This Surprises People

You know you contributed $100,000 after tax.

You know you already paid income tax on that money.

So emotionally, it feels obvious:

“That’s my tax-free portion. Move it to Roth.”

But federal IRA taxation doesn’t generally allow you to isolate the basis that way when pre-tax and after-tax IRA money are combined for the applicable calculation.

That’s why the tax return matters as much as the account statement.

Which IRA Accounts Can Matter for the Pro-Rata Calculation?

This is another place people get caught.

You may have more than one IRA.

For example:

• Traditional IRA #1
• Traditional IRA #2
• Rollover IRA
• SEP IRA
• SIMPLE IRA

For federal tax purposes, applicable traditional IRA balances are generally aggregated when determining the taxable portion of distributions and conversions.

Opening a brand-new traditional IRA doesn’t necessarily allow you to separate the after-tax dollars from all your other applicable IRA money.

The IRS calculation can look across applicable IRA accounts rather than treating each account as its own isolated tax bucket.

What About My 401(k)?

This is where account type matters.

Employer plans such as a 401(k) aren’t simply treated as another traditional IRA for every aspect of the IRA pro-rata calculation.

That distinction can create planning possibilities in certain situations.

But employer plans have their own eligibility, rollover, distribution, investment, fee, creditor-protection, and plan-document rules.

Don’t move retirement assets solely to manipulate a tax calculation without understanding what you’re giving up or gaining.

Why a Rollover IRA Can Create a Surprise

Suppose you have a tiny traditional IRA containing a recent nondeductible contribution.

You think you’re going to convert it to Roth with little taxable income.

But you also have an $800,000 rollover IRA from an old 401(k).

That rollover IRA can matter to the applicable IRA aggregation and pro-rata calculation.

Suddenly the transaction may be far more taxable than you expected.

The IRA you aren’t converting can still affect the tax calculation on the IRA you are converting.

This Is Why the “Backdoor Roth” Conversation Can Get Confusing

You may have heard someone say:

“Just make a nondeductible IRA contribution and convert it.”

That may sound simple.

But if you already have substantial pre-tax traditional, SEP, SIMPLE, or rollover IRA balances that count under the applicable rules, the pro-rata calculation can create a very different tax result.

That’s why a strategy that sounds easy for someone with no other IRA assets may not work the same way for someone approaching retirement with $1 million in rollover IRAs.

This Article Isn’t Really About a $7,000 Contribution

For the FPP Financial client, the bigger issue is usually this:

You may have $500,000, $1 million, $2 million, or more in tax-deferred retirement accounts.

Some portion may contain after-tax basis.

Now you’re considering a substantial multi-year Roth conversion strategy.

If the basis isn’t identified correctly, your projected conversion tax can be wrong.

And if the starting tax assumption is wrong, the rest of the Roth analysis can be wrong too.

Example: $1.5 Million IRA With $75,000 of Basis

Suppose you’re 61.

You have:

• $1.5 million across applicable traditional and rollover IRAs
• $75,000 of properly documented IRA basis
• $350,000 in cash and taxable investments
• Social Security planned later
• No pension

You want to convert $200,000 this year.

If someone simply assumes the entire $200,000 is taxable, the tax projection may be too high.

If someone assumes the first $75,000 is tax-free, the projection may be too low.

The actual taxable and nontaxable portions need to be calculated under the applicable pro-rata rules.

What If You Lost Your Old Form 8606?

This can become frustrating.

You remember making nondeductible contributions.

Maybe it happened 15 years ago.

Maybe you’ve changed accountants three times.

Maybe you rolled accounts between custodians.

Now nobody seems to know the basis.

This isn’t something I would guess at.

Your qualified tax professional may need to review prior returns, account records, contribution records, and other available documentation to determine what can be substantiated.

Before doing a large Roth conversion, find out whether the basis records are clean.

What If Form 8606 Was Never Filed?

That’s a tax-compliance issue that should be reviewed with a qualified tax professional.

The fact that a form wasn’t filed doesn’t mean you should invent a basis number today.

Nor should you automatically assume the basis has no value.

The records and applicable correction procedures need to be reviewed properly.

Can You Choose Which Dollars Get Converted?

Inside a mixed traditional IRA environment, you generally don’t get to simply label a specific conversion as:

“These are my after-tax dollars.”

The applicable federal calculation determines the taxable and nontaxable portions.

That’s the heart of the pro-rata rule.

What Happens to the Basis You Don’t Use?

In a partial distribution or conversion, you may recover only part of your total IRA basis.

Remaining basis generally carries forward for use in determining the taxable portion of future applicable IRA distributions or conversions.

That’s another reason accurate recordkeeping matters.

You don’t want the remaining basis disappearing from your records after one conversion year.

What If You Convert the Entire IRA?

If all applicable traditional IRA assets are distributed or converted and the transaction is properly calculated, the remaining basis can affect the taxable portion.

But a full conversion can create a very large amount of taxable income when most of the account is pre-tax.

The fact that some basis exists doesn’t automatically make converting the entire account a good idea.

The pro-rata rule tells us how the transaction is taxed. It doesn’t tell us whether the transaction is smart.

What If Your IRA Loses Value?

Market values can affect the calculation.

Suppose you’ve made after-tax contributions and the overall IRA subsequently declines.

The relationship between basis and total IRA value may look different.

That’s one reason the actual account values and tax-year information need to be used rather than an old estimate.

What If Your IRA Grows Before December 31?

This is another detail people overlook.

The federal calculation can involve applicable year-end IRA values.

So an account balance at the time you initiate a conversion may not be the only number relevant to the final tax calculation.

Market movement, additional contributions, distributions, rollovers, and other transactions during the year can matter.

Don’t assume the tax result is final just because the conversion happened in March.

What If You Have an Old 401(k) and a Traditional IRA?

Now there may be additional planning questions.

For example, some employer plans may accept eligible IRA rollover assets under their plan rules.

That can potentially change the composition of assets remaining in applicable IRAs.

But this is not something to do blindly.

You need to compare:

• Plan eligibility
• Investment choices
• Fees
• Distribution rules
• Creditor considerations
• Access to money
• Plan-specific restrictions
• The tax objective

Your tax and financial professionals should coordinate the transaction before assets move.

What If Your 401(k) Won’t Accept the Rollover?

Then that particular planning route may not be available.

Employer plans control what rollovers they accept under their governing documents and procedures.

That’s why I don’t want a strategy built around a rollover assumption until the plan administrator confirms it.

What About SEP and SIMPLE IRAs?

These accounts can be especially easy to overlook.

You may think:

“That’s my old self-employment account. It has nothing to do with this Roth conversion.”

For the applicable IRA pro-rata calculation, balances in certain SEP and SIMPLE IRAs can matter.

Make sure your tax professional knows about all of your IRA accounts before calculating the taxable portion.

What About an Inherited IRA?

Inherited IRA rules are different from your own IRA rules in important ways.

Don’t assume an inherited IRA can simply be combined with or treated exactly like your own traditional IRA for Roth conversion purposes.

In particular, non-spouse inherited traditional IRA assets generally cannot simply be converted to your own Roth IRA.

Inherited-account decisions should be reviewed separately under the applicable beneficiary rules.

What About My Spouse’s IRA?

IRAs are individual accounts.

Your spouse’s IRA isn’t simply merged into your IRA basis calculation because you file a joint tax return.

Each spouse’s IRA basis and applicable IRA balances need to be tracked separately.

This can create very different conversion results for two spouses in the same household.

Example: One Spouse Has Basis and the Other Doesn’t

Imagine a married couple.

Spouse A has:

• $1.2 million traditional IRA
• No after-tax basis

Spouse B has:

• $300,000 traditional IRA
• $60,000 documented basis

The tax characteristics of a $100,000 conversion from Spouse A’s IRA may be different from a $100,000 conversion from Spouse B’s IRA.

That’s another reason I don’t automatically say:

“Just convert $100,000 from whichever IRA is easiest.”

The Pro-Rata Rule Can Affect Which Spouse Converts First

If the spouses have different IRA balances, basis, ages, RMD timelines, and beneficiary goals, the account selected for conversion can matter.

That doesn’t mean basis is the only consideration.

It means it’s another variable that belongs in the analysis.

Does IRA Basis Make a Roth Conversion More Attractive?

Potentially.

If part of a conversion is a recovery of after-tax basis, that portion generally isn’t taxed again under the applicable federal calculation.

That can reduce the immediate tax cost relative to an otherwise identical conversion consisting entirely of pre-tax amounts.

But don’t jump from that fact to:

“Then I should convert everything.”

The remaining taxable income can still be substantial.

Does IRA Basis Mean the Conversion Is Tax-Free?

Usually not when substantial pre-tax IRA money is also present.

This is probably the biggest misunderstanding.

You have $100,000 of basis.

You convert $100,000.

That does not generally mean the conversion is automatically tax-free.

The pro-rata calculation still matters.

Why the Taxable Amount Matters Beyond the Tax Bill

Suppose you thought a $200,000 conversion would create $200,000 of taxable income.

After properly accounting for basis, the taxable portion is lower.

That can potentially affect:

• Your federal tax calculation
• Your state tax calculation
• Estimated tax payments
• Social Security taxation calculations
• ACA Marketplace calculations when applicable
• Future Medicare income-related premium calculations
• Your available cash

A better taxable-income estimate can change more than one line on the tax return.

What If You’re Already on Medicare?

Medicare income-related premium adjustments generally look at modified adjusted gross income from an earlier tax return under applicable rules.

If IRA basis reduces the taxable portion of a Roth conversion compared with what you originally assumed, that may change the income included in the relevant calculation.

But don’t estimate this from the conversion amount alone.

Use the actual projected taxable amount.

What If You’re Taking Social Security?

The federal calculation determining how much Social Security is included in taxable income depends on broader income.

Again, the taxable portion of the conversion matters.

A $100,000 conversion and $100,000 of taxable conversion income aren’t necessarily identical when IRA basis is present.

What About Future RMDs?

IRA basis doesn’t eliminate the broader issue of a large traditional IRA.

Suppose you’re 62 with $1.5 million in traditional IRAs and $75,000 of basis.

Most of the account may still represent pre-tax money.

If the account remains substantial, applicable future RMDs can still matter.

Roth conversions may potentially reduce future traditional IRA balances and future RMDs relative to an otherwise identical no-conversion scenario.

The basis simply changes part of the tax calculation along the way.

The Emotional Side: “I Already Paid Tax on This Money”

This one makes people angry.

You did what you were supposed to do.

You reported income.

You made a contribution you couldn’t deduct.

You paid the tax.

Now someone tells you most of your conversion may still be taxable.

You think:

“They’re taxing me twice.”

That’s not necessarily what’s happening.

Your documented basis is designed to track the portion that has already been taxed.

The problem is that the basis is generally recovered proportionately when mixed with pre-tax IRA assets.

“We Should Be Able to Handle This Ourselves”

You can understand the basic concept.

But then you have:

Three IRAs.

An old rollover IRA.

A SEP IRA you forgot about.

Twenty years of tax returns.

A missing Form 8606.

And a $250,000 Roth conversion you’re trying to complete before year-end.

You think:

“We should be able to handle this ourselves.”

Maybe.

But this is exactly the kind of transaction where a paperwork error can create a tax result you didn’t expect.

“What If We Mess This Up and Regret It?”

You don’t want to overpay tax.

You don’t want to claim basis you can’t support.

You don’t want to complete the conversion and discover another IRA changed the calculation.

You don’t want to find out after December 31 that the strategy was based on the wrong numbers.

You think:

“What if we mess this up and regret it?”

Then get the IRA inventory and basis records straight before moving a large amount of money.

“I Don’t Want to Ask My Kids for Help”

Tax paperwork may sound disconnected from retirement independence.

It isn’t.

A large unexpected tax bill can consume cash you expected to use for retirement.

You want enough resources to handle your own expenses.

You think:

“I don’t want to ask my kids for help.”

Then accurate tax assumptions matter.

Protecting independence starts with knowing what the transaction is likely to cost before you do it.

How Can the Roth Conversion Tax Be Addressed?

Once your tax professional has determined the projected taxable portion, we can evaluate how the resulting conversion tax fits into the broader strategy.

Option 1: Outside Cash or Taxable Assets

Outside assets may be used to address taxes generated by Roth conversions.

This can allow more of the selected conversion amount to reach or remain inside the Roth.

If IRA basis reduces the projected taxable portion, the outside cash requirement may also be different from a projection that assumed the entire conversion was taxable.

Adequate retirement liquidity still needs to remain.

Option 2: Retirement Assets or Withholding

Another approach may involve retirement assets or withholding.

This can reduce the amount ultimately reaching or remaining inside the Roth and may create additional tax considerations.

The transaction mechanics should be coordinated before converting.

Option 3: Contractual Carrier Bonus Value

When suitable, certain annuity contracts may provide contractual carrier bonus value that can be included in the broader economic comparison.

In some modeled scenarios, contractual carrier bonus value may economically offset some or potentially all of the conversion-tax cost over the strategy period.

This may potentially reduce the need for additional personal out-of-pocket cash from an overall economic standpoint.

The carrier does not assume your IRS tax liability.

A carrier bonus isn’t an IRS tax credit.

Your tax remains your responsibility.

Bonus terms, vesting, surrender provisions, liquidity restrictions, charges, participation rates, caps, spreads, crediting methods, income features, guarantees, and other contractual provisions need to be evaluated.

This Is Where Roth Blueprint Software Comes In

The software is only as useful as the assumptions going into it.

If you have IRA basis, I don’t want to pretend every dollar converted has the same tax treatment.

Once the appropriate tax inputs have been determined with your qualified tax professional, our Roth Blueprint software can assess thousands of potential modeled Roth conversion scenarios.

What Can We Compare?

We can assess different:

• Traditional IRA balances
• Roth balances
• Taxable conversion assumptions
• Outside liquidity
• Conversion starting ages
• Annual conversion amounts
• Multi-year conversions
• Variable annual conversions
• No conversion
• Projected conversion taxes
• Different approaches to addressing conversion taxes
• Social Security timing
• Pension income
• Investment income
• Potential Marketplace considerations before Medicare
• Potential Medicare considerations
• Projected RMDs
• Surviving-spouse outcomes
• Beneficiary outcomes
• Legacy outcomes

Then we compare the strategies rather than guessing from the gross conversion amount.

Example: Make Different Conversion Amounts Compete

Imagine you’re 63.

You have:

• $1.4 million in applicable traditional and rollover IRAs
• Documented after-tax IRA basis
• $350,000 outside assets
• Social Security planned later
• No pension

After your tax professional determines the appropriate basis and tax assumptions, we might compare:

Scenario A: No Roth conversion.

Scenario B: $75,000 annual conversions.

Scenario C: $150,000 annual conversions.

Scenario D: Larger conversions during selected years.

Scenario E: Variable conversions based on taxable income, liquidity, Medicare, Social Security, and projected RMDs.

Then we look at:

• Projected taxable conversion amounts
• Projected conversion taxes
• Traditional IRA balances
• Roth balances
• Future RMDs
• Retirement income
• Liquidity
• Potential Medicare considerations
• Surviving-spouse outcomes
• Beneficiary outcomes
• Legacy

The goal is not to convert the most money. The goal is to find the conversion strategy that produces the strongest modeled retirement result.

The Retirement Math Method™

This is why we use our Retirement Math Method™.

I don’t start with:

“Your entire Roth conversion is taxable.”

I don’t start with:

“You already paid tax on $100,000, so just convert that $100,000 tax-free.”

And I don’t guess at your basis.

We need the correct tax inputs first.

Then we make the strategies compete.

Maybe the basis improves the economics of the conversion.

Maybe a smaller conversion wins.

Maybe larger multi-year conversions win.

Maybe your IRA structure creates another planning issue that should be addressed first.

Maybe the basis barely changes the overall recommendation.

Maybe doing nothing wins.

I don’t try to sell you on the strategy. I make the strategy prove itself with the math.

Let the math do the talking.

Frequently Asked Questions About the Roth Conversion Pro-Rata Rule

What is the pro-rata rule for Roth conversions?

When applicable traditional IRA assets contain both pre-tax and after-tax amounts, federal tax rules generally determine the taxable and nontaxable portions of a conversion proportionately rather than allowing the owner to simply select only after-tax dollars for conversion.

Will I be taxed twice on my nondeductible IRA contributions?

Properly documented IRA basis generally represents amounts that have already been taxed and is used in determining the nontaxable portion of applicable distributions and conversions. Accurate basis records are essential.

What is Form 8606?

Form 8606 is generally used to report nondeductible traditional IRA contributions and determine the taxable portion of certain distributions and Roth conversions when basis is present.

What if I forgot to file Form 8606?

Don’t guess at the basis. A qualified tax professional should review your prior returns and available records and determine what corrective steps, if any, are appropriate.

Can I just convert my after-tax IRA money first?

Generally, you can’t simply designate only the after-tax portion of mixed applicable IRA assets as the dollars being converted. The federal pro-rata calculation determines the taxable and nontaxable portions.

Does my rollover IRA count?

Applicable rollover IRA balances can matter when determining the pro-rata treatment of a Roth conversion.

Does my SEP IRA count?

Balances in applicable SEP IRAs can matter under the IRA aggregation rules used for the calculation.

Does my spouse’s IRA count with mine?

IRAs are individually owned. Each spouse’s IRA basis and applicable account balances are generally calculated separately even when the couple files a joint federal tax return.

Does my 401(k) count in the IRA pro-rata calculation?

Employer plans such as 401(k)s are governed by different rules and aren’t simply aggregated as traditional IRAs for this IRA calculation. However, rollovers between employer plans and IRAs can change the account structure and should be reviewed carefully.

Can Roth Blueprint account for after-tax IRA basis?

Once the appropriate tax treatment and assumptions have been determined with your qualified tax professional, those inputs can be incorporated into the broader Roth conversion scenario analysis so different conversion strategies can be compared.

Before You Convert, Find Out What You Actually Own

You don’t just have a $1 million IRA.

You may have:

Pre-tax contributions.

After-tax contributions.

Rollovers.

Investment growth.

Multiple accounts.

Old tax records.

Different tax characteristics hiding underneath one account balance.

That $1 million number doesn’t tell you by itself how much of a Roth conversion will be taxable.

That’s why the basis needs to be understood first.

Have After-Tax IRA Money and $500,000+ in Retirement Accounts? Let’s Run the Math.

If you’ve made nondeductible traditional IRA contributions and have $500,000, $750,000, $1 million, $2 million, or more in traditional IRAs, rollover IRAs, 401(k)s, or other retirement assets, don’t assume every dollar has identical tax treatment.

Start by working with your qualified tax professional to determine your IRA basis and the appropriate taxable-conversion assumptions.

Then, when you meet with me, we can use our Roth Blueprint software and Retirement Math Method™ to assess thousands of potential modeled scenarios.

We can compare:

• No Roth conversion
• Smaller annual conversions
• Larger annual conversions
• Multi-year conversions
• Variable annual conversions
• Projected taxable conversion amounts
• Projected conversion taxes
• Different approaches to addressing conversion taxes
• Retirement spending
• Personal liquidity
• Social Security timing
• Pension income
• Potential healthcare-related income considerations
• Projected traditional balances
• Projected Roth balances
• Projected RMDs
• Retirement income
• Surviving-spouse outcomes
• Beneficiary outcomes
• Legacy outcomes

Then we put the strategies side by side.

Maybe your IRA basis makes part of the conversion less taxable than you expected.

Maybe the pro-rata rule makes the conversion more taxable than you expected.

Maybe your account structure needs attention before the conversion.

Maybe smaller conversions win.

Maybe larger conversions win.

Maybe doing nothing wins.

That’s what you want to know before converting hundreds of thousands of dollars based on a tax assumption that may not be correct.

We don’t sell you a retirement strategy. We run the math and let you decide.

Let the math do the talking.

Schedule Your Roth Conversion Strategy Appointment

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Important Disclosure

This article is for educational purposes only and isn’t intended as individualized tax, legal, accounting, investment, insurance, Medicare, Social Security, estate-planning, or retirement-planning advice. FPP Financial does not provide tax or legal advice. IRA basis, nondeductible contributions, Form 8606 reporting, IRA aggregation, pro-rata calculations, rollovers, employer-plan transactions, SEP IRA rules, SIMPLE IRA rules, inherited-account rules, and Roth conversions can involve complex federal and state tax requirements. Properly documented after-tax IRA basis can affect the taxable portion of applicable IRA distributions and Roth conversions, but the actual calculation depends on individual facts, account balances, year-end values, distributions, conversions, rollovers, prior basis, and current tax law. Statements and numerical examples in this article are simplified illustrations and shouldn’t be used to prepare a tax return or determine the taxable amount of an actual conversion. Missing or incorrectly filed Forms 8606, incomplete contribution records, prior rollovers, multiple IRA accounts, and other transactions can materially affect the analysis and should be reviewed by a qualified tax professional. Employer retirement plans have separate plan documents, eligibility requirements, rollover rules, fees, investment options, creditor considerations, distribution provisions, and other features that should be evaluated before moving assets. Roth conversions generally create taxable income to the extent converted amounts would otherwise be taxable. Qualified Roth IRA distributions are generally tax-free under current federal rules when applicable requirements are satisfied. Taxable Roth conversion income can affect federal and state income taxes, marginal tax rates, the federal calculation determining how much of Social Security benefits is included in taxable income, ACA Marketplace premium tax credits when applicable, Medicare premiums, estimated tax requirements, liquidity, beneficiary outcomes, and other parts of a financial plan. Required minimum distribution starting ages and rules vary based on birth year, account type, beneficiary status, and current law. An RMD isn’t eligible for Roth conversion. Roth conversions can potentially reduce future traditional retirement-account balances and future RMDs relative to an otherwise identical no-conversion scenario, but no specific tax, investment, Medicare, Social Security, RMD, retirement-income, surviving-spouse, beneficiary, liquidity, or legacy outcome is guaranteed. Tax laws, retirement-account rules, employer-plan rules, Social Security rules, Medicare rules, estate rules, beneficiary rules, and investment values can change. Roth Blueprint calculations and other projections are based on assumptions and information entered into the analysis and aren’t guarantees of future tax results, account values, investment performance, retirement income, Medicare premiums, Social Security outcomes, RMD reductions, surviving-spouse outcomes, beneficiary outcomes, legacy results, liquidity, or product performance. Insurance and annuity products may contain fees, charges, surrender periods, liquidity restrictions, eligibility requirements, bonus provisions, participation rates, caps, spreads, crediting methods, income features, guarantees, and other contractual terms. Guarantees are subject to the claims-paying ability of the issuing insurer. A carrier bonus isn’t an IRS tax credit and doesn’t transfer the client’s tax liability to an insurance company. Statements that contractual carrier bonus value may economically offset some or potentially all of a modeled conversion-tax cost aren’t statements that the tax disappears or that the carrier directly pays the client’s tax liability. Before completing a Roth conversion, claiming or calculating IRA basis, correcting Form 8606 reporting, rolling assets between an IRA and employer plan, taking retirement distributions, using outside assets to address taxes, purchasing an insurance or annuity product, or making other retirement decisions, consider working with qualified tax, legal, accounting, financial, investment, insurance, Medicare, Social Security, estate-planning, and other appropriate professionals who can evaluate your individual circumstances and current rules.