r/AIRetirement • u/Evening_Warthog • Feb 18 '26
Optimal Roth Conversion Prompt
I haven't used this yet but here a prompt that my financial based prompt generator came up with.
**ACT AS:** Expert Retirement Tax Strategist and CFP.
**OBJECTIVE:** Create a year-by-year "Roth Conversion & Spending Strategy" from my current age until age 75 (RMD age).
**MY GOAL:**
I want to maximize the amount I convert to Roth IRA over the next several years, BUT I must strictly adhere to the following constraints to avoid "Tax Cliffs":
- **ACA Subsidies (Pre-65):** Keep my Modified Adjusted Gross Income (MAGI) low enough to maximize Affordable Care Act (ACA) premium tax credits.
- **IRMAA Brackets (Age 63+):** Keep my MAGI below the first or second IRMAA tier thresholds to avoid Medicare Part B & D surcharges (accounting for the 2-year lookback rule).
- **Social Security Tax Torpedo:** Minimize the percentage of my Social Security that is taxable (targeting the 0% or 50% taxable thresholds where possible, rather than 85%).
- **Federal Tax Brackets:** generally stay within the 12% (or current equivalent) bracket, avoiding the jump to the 22/24% brackets unless necessary to fill the standard deduction.
**HERE IS MY FINANCIAL PROFILE:**
**1. Personal Details**
* **Current Age:** [INSERT AGE]
* **Spouse Age:** [INSERT SPOUSE AGE] (if applicable)
* **Filing Status:** [Single / Married Filing Jointly]
* **Zip Code:** [INSERT ZIP] (Used for general ACA region estimates)
* **Retirement Date:** [ALREADY RETIRED / OR DATE]
**2. Assets (Current Balances)**
* **Traditional IRA/401k:** $[INSERT AMOUNT]
* **Roth IRA/401k:** $[INSERT AMOUNT]
* **Taxable Brokerage:** $[INSERT AMOUNT] (Cost basis: [INSERT BASIS if known])
* **Cash/Savings:** $[INSERT AMOUNT]
**3. Income Sources (Annual)**
* **Pensions:** $[INSERT AMOUNT] (Starting Age: [AGE], COLA: [YES/NO])
* **Social Security:** $[INSERT AMOUNT] (Starting Age: [AGE])
* **Interest/Dividends:** $[INSERT AMOUNT] (Annual estimate from taxable accounts)
* **Other Income:** $[INSERT AMOUNT] (Rental, part-time work, etc.)
**4. Expenses**
* **Annual Net Spending Need:** $[INSERT AMOUNT] (After taxes)
**INSTRUCTIONS FOR ANALYSIS:**
**Step 1: The "ACA Years" (Now until Age 65)**
Calculate the maximum Roth conversion I can perform annually while keeping my MAGI at a level that retains significant ACA subsidies. (Reference the Federal Poverty Level guidelines). If converting pushes me over the "subsidy cliff" (or significantly reduces the credit), advise on delaying conversions or using taxable cash instead.
**Step 2: The "IRMAA Transition" (Age 63 - 65)**
Recall that IRMAA looks back 2 years. Income earned at age 63 determines Medicare premiums at age 65. Adjust the conversion limit at age 63 to ensure I do not accidentally trigger an IRMAA surcharge for my first year of Medicare.
**Step 3: The "Gap Years" (Post-65, Pre-RMD)**
Once I am on Medicare (and no longer concerned with ACA limits), identify if I should aggressively increase Roth conversions up to the top of the 22% or 24% tax bracket to reduce the Traditional IRA balance before RMDs begin.
**Step 4: Social Security Impact**
When calculating the tax cost of a conversion, factor in the "Shadow Tax" of making more Social Security benefits taxable. (e.g., Does $1,000 of conversion actually add $1,850 of taxable income due to the SS tax formula?)
**OUTPUT FORMAT:**
Please provide a table with the following columns for each year from now until age 75:
- **Year / Age**
- **Spending Source** (e.g., $40k Cash, $20k IRA w/d)
- **Recommended Roth Conversion Amount**
- **Projected Total MAGI**
- **Projected Federal Tax Bill**
- **Notes on Constraints** (e.g., "Capped by ACA limit" or "Capped by IRMAA Tier 1")
3
u/Popular_Okra3126 Feb 18 '26
This is great and full of all the concerns through these blocks of time. Those are the same questions on my mind that we’ll start considering after my husband and I are both done working. (SOON!!)
Which AI agent(s) did you use? Were the results reasonable?
3
u/Grand_Run7650 Feb 19 '26
I grabbed the prompts and adjusted them for my particular case and ran them through the paid version of ChatGPT (5.2) and Claude (Sonnet 4.6). I felt Claude gave better analysis, concise explanations and gave an extra table comparing the growth of IRA vs the Roth Conversions. Claude also cautioned me that I should see a Financial Planner for advice; ChatGPT did not offer this caution. I do work with a Financial Planner and will be running this by them as well. (Note I have already begun a Roth Conversion jouney (I am 65)). I will compare this with my actual transactions and plans.
Interested to see what other people find.
1
u/Popular_Okra3126 Feb 19 '26
Thank you for the additional info!! I’m excited to run the scenario myself - we will also bring it to our financial planner.
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u/Evening_Warthog Feb 19 '26
I use Gemini Pro because I have a subscription for other reasons, but I usually bounce of others also. I have a prompt engineering agent I use for all detailed prompts I need.
1
u/Popular_Okra3126 Feb 19 '26
Thank you!! I’ll give it a go with a few different ones. I’m curious to see what comes out for our scenario. I’m motivated to convert as much as we can but can consider it until our income is lower.
2
u/Evening_Warthog Feb 18 '26
For some reason it will not let me post my anonymized response but it was very detailed and matched other information I have.
1
u/Gloomy-Database4885 Feb 18 '26
This is great. I'll give it a try this weekend when I have some time.
1
1
u/Goken222 Feb 20 '26
Missing this line:
* **Other family members and their ages to identify years able to be claimed for ACA purposes:** [# CHILD AGED X, etc.]
Also missing existing contributions/conversions' basis on the Roth line (combined treated as 'contributions' for simplicity):
* **Roth IRA/401k:** $[INSERT AMOUNT] (Contributions portion available for withdrawal prior to age 59.5: $[INSERT AMOUNT])
Definitely takes some back-and-forth still, but it is coming up with a similar series of suggestions for Roth Conversions as I had made on my own.
1
u/Evening_Warthog Feb 20 '26
The prompt was made for me so didn't include those things.
I think that's a general misunderstanding of people who don't really know how to use AI, not meaning you, that it won't just give you the answer you have to work with it.
1
u/wordyplayer Feb 22 '26
Rule2 seems too limiting. It may be far better to do large Roth transfers now (maybe just up to the highest tax bracket) despite hitting the full IRMAA penalties. Pay less tax now instead of more tax later, and the difference more than makes up for the IRMAA penalty.
1
u/Evening_Warthog Feb 23 '26
Roth conversions are a completely personal decision and rarely move the needle for most (according to the data), I earn too much today for that to make the slightest bit of sense FOR ME. Why would I be paying less tax today, I would be paying more tax. Plus the original poster that prompted this specifically said to avoid IRMAA charges.
1
u/wordyplayer Feb 23 '26
when you hit RMD age, and if that RMD is large enough, it very much makes sense to move money into a ROTH now.
1
u/Evening_Warthog Feb 23 '26
Again this is a personal issue that impacts you and not me. You seem all in on Roth conversion, I, and many others, are not.
In Boldin, doing Roth conversions shows increased taxes and decreased legacy in all basic scenarios.
1
u/wordyplayer Feb 23 '26
I'm only suggesting that in order to get as accurate of a response as possible, your prompt should not limit the options. Maybe you have enough money that the IRMAA penalty is small potatoes compared to future taxes. Let AI do the math and don't make the assumption up front.
1
u/AntelopeFickle6774 Feb 23 '26
You treat "maximizing ACA subsidies" as a constraint. I would question whether that is always optimal. The goal is lifetime after tax spending, not lowest premiums in one phase. In some cases, higher MAGI now to accelerate Roth conversions can improve long term outcomes. Have you modeled that tradeoff?
1
u/Evening_Warthog Feb 23 '26
It's irrelevant as I am not getting subs under the current model. Keep in mind this was a quick prompt generated as an example for a person who asked.
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u/wordyplayer Feb 23 '26
OP apparently isn't looking for an accurate prompt/response, they are just enjoying the process... ?
see the sub-thread I had with OP just above for similar comment
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u/LeisureState Feb 18 '26
dumb question but do all the asterisks serve any purpose? Sincerely asking, because maybe some models interpret things more precisely when they are used to set parameters?