Roth Conversion Explorer Error Message

If you received an error message, it does not mean there is a problem with your plan. The beta, or test, version of the Explorer does not accommodate every scenario and is not compatible with all of the NewRetirement withdrawal strategies. It also could mean that your results took too long to process. The NewRetirement team will continue to release new versions to optimize speed and expand functionality. Please look for notifications of Roth Conversion Explorer updates and try again as the tool evolves.

Roth Conversion Explorer Error Message "Optimizer failed to improve forecast"

If you received the message, "Optimizer failed to improve forecast" here are a few common reasons this could happen:

1. Your current Roth Conversion plan has higher growth assumptions for the converted accounts.

The Explorer assumes that the converted Roth Account will grow at the same rate as the account that it was converted from. Check My Plan > Accounts and Assets to see if the Roth Conversions that you modeled in your plan.

2. Your 401k account type is "Current" and you are retiring early.

The Explorer assumes that current 401k's should not be converted until you are eligible to withdraw money without a penalty. If you plan to stop working before 59 1/2 and you want your current plan to be included in the Explorer Plan, change your account type to "Former 401k" on My Plan > Accounts and Assets.

3. The expenses and withdrawals modeled in your plan are already triggering a tax liability, adding Roth Conversions on top of those withdrawals does not project a larger estate.

The Explorer generates a plan that projects the largest liquid estate at your goal age. Theoretically, this occurs when you convert money early in your plan and allow it to grow tax-free for a long period of time. Roth Conversions may not be right for your plan.

4. You may not have enough taxable savings to cover the tax liability for a Roth Conversion.

The Explorer will not recommend a Roth Conversion if you have insufficient funds in your taxable accounts to cover the liability. This could be a reason why the Explorer did not suggest a forecast improvement.

5. Your after-tax accounts have a higher growth rate than your tax-deferred accounts.

The Explorer assumes that the converted account will grow at the same rate as the account it was converted from. If taxable money is growing at a higher rate, it may not be beneficial to use the money for taxes since the converted will grow at a slower pace.

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