Using Spending Game for Roth Conversion Planning

In this training, we take a closer look at the Spending Game tool and one of its newer capabilities for illustrating Roth conversions.

With increasing conversations around future tax rates and concerns that taxes may rise over time, many advisors are exploring Roth conversion strategies with clients. Spending Game provides tools that can quickly model and visualize those scenarios.

Starting with the Present Position

The example begins with a simple Spending Game case using:

• Lifetime income sources
• Required living expenses
• Retirement income streams
• An IRA growing at 5%

One of the most useful reports for Roth conversion planning is the Tax Projection Report found under Reports.

This report highlights two key items:

1. Marginal Tax Bracket
The example client remains in the 12% tax bracket initially but later moves into the 22% bracket.

Why?

Because Required Minimum Distributions (RMDs) begin and force withdrawals from the IRA, increasing taxable income.

2. Tax Margin Headroom
The report also calculates available room within the current tax bracket.

In this example, the client could convert approximately:

$33,000

to a Roth account while remaining in the 12% tax bracket.

This creates an opportunity to shift assets strategically before future tax increases or RMD impacts.

Using the Roth Conversion Tool

The updated Spending Game tools now simplify this process.

Using the Reallocation Tool, funds can be moved from the IRA into a Roth account.

Navigate to:

IRA Account → Withdrawal Column → Reallocate Funds (RF)

When a Roth account exists in the case, an additional option becomes available:

Fund Tax Bracket

This allows advisors to model scenarios such as:

“Convert as much as possible each year while remaining in the 12% tax bracket.”

For example:

• Convert funds annually for 10 years
• Stay within the desired tax bracket
• Pay taxes from lifestyle cash flow if desired
• Automatically adjust conversion amounts year by year

The tool performs the calculations and reallocations automatically.

Comparing the Results

After running the Roth conversion scenario, revisit the Tax Projection Report.

The updated projection demonstrates:

• Extended time in lower tax brackets
• Reduced impact from RMDs
• More tax diversification
• Additional tax-free growth inside the Roth account

Visualizations can also compare future outcomes to show the impact of converting versus leaving assets in traditional retirement accounts.

Additional Help Available

If you would like more help using Spending Game:

Support Site:
support.moneytrax.com → Spending Game section

Need help with a client case?

The Concierge Program offers one-on-one Zoom sessions for:

• Roth conversions
• Spending Game cases
• Financial GPS
• Presentation tools
• Private training

Sessions are available at:

$100/hour

Bring your case files and work directly through the process step-by-step.