🔹 Boldin’s Roth Conversion Strategies
Boldin offers several strategies (Tax Bracket, IRMAA Bracket, Lowest Lifetime Tax, Highest Estate Value, etc.), each with a single optimization goal:
Tax Bracket → constrain annual conversions to a chosen bracket.
IRMAA Bracket → constrain annual conversions to a chosen Medicare IRMAA surcharge tier.
Lowest Lifetime Tax → minimize lifetime cumulative taxes.
Highest Estate Value → maximize gross estate at death.
Characteristics:
Rule-based or optimizer-driven, but within a fixed lens.
Often show “biggest number” results (total taxes, estate size, etc.) without discounting future values.
More intuitive to explain (“fill the 24% bracket” or “pay the least total tax”).
🔹 NPV (Net Present Value) Approach
Objective: Maximize the present value of after-tax wealth (spending + estate).
How it works:
Converts all future taxes, withdrawals, conversions, and account balances into today’s dollars using a discount rate (e.g., inflation or expected investment return).
Compares Roth vs. no-Roth scenarios on an after-tax, discounted basis.
Key advantage: Recognizes that a tax dollar paid in 30 years is not as costly as one paid today.
Output: Tells you which conversion schedule maximizes the economic value in present terms.
🔹 How They Differ
Aspect | Boldin’s Strategies | NPV Approach |
Optimization lens | Single target (lifetime tax, estate value, bracket) | Unified metric: present value of after-tax wealth |
Time value of money | Ignored (future values not discounted) | Explicitly included |
Ease of explanation | Intuitive: “stay in bracket” or “minimize taxes” | Less intuitive: requires discount rate assumptions |
Estate taxes | Gross values, not adjusted | Fully after-tax, discounted |
Practicality | Easier to align with client behavior | More precise economic comparison |
🔹 Which Is Better?
NPV is more rigorous — it reflects both taxes and the time value of money, giving a truer measure of economic benefit.
Boldin’s strategies are more user-friendly — they frame the trade-offs in ways people can act on (brackets, lifetime taxes, estate size).
Best practice: Advisors often use Boldin’s strategies to frame options (simple narratives), then validate the winner with an NPV lens to confirm which path maximizes after-tax, present-value wealth.
✅ So, NPV is “better” economically, but Boldin’s strategies are “better” for planning conversations. They’re not mutually exclusive — they complement each other.