Hmm.
I set up a simple Roth conversion analysis. If you just add up the values of your accounts, you have less money at the end of the day by doing the conversion, having lost the opportunity to earn money on the taxes you paid to do the conversion. However If you discount the traditional IRA by the taxes that will eventually be paid on its withdrawals, yes, the conversion makes sense after a few years (4 with my numbers).
I had done a much more complete analysis of my particulars, including federal and NY state tax tables, effects of SECURE including the new RMD start age, the expiration of TCJA rates in '26, having to distribute my inherited IRA over the next 10 years, when we plan on starting Social Security, Medicare IRMAA on parts B&D, inflation, our projected living expenses, but not the 3.8% NII.
In this analysis a full Roth conversion is a bad deal both from a total asset and a post-tax asset view at low (2% over inflation), largely I think because the tax hit is so high, pushing us well into 42% marginal tax during the conversion years from which we never recover. At higher growth rates (say 4% over inflation, a more reasonable long-term rate), conversion of most of the money is better, but not a whole lot - 4.5% after-tax out in 2044.
So, still kind of a wash.
