In our 510,000-path Monte Carlo study of 30-year retirement outcomes, Wisconsin retirees finished at 72.11% success rate (ranked #44 of 51 by success rate, #43 of 51 by lowest median lifetime state tax). Median 30-year state-tax cost: $96,390 — that is $96,390 more than a Wyoming retiree pays. Median terminal balance after 30 years: $835,576. State tax is part of the optimization here — the playbook below shows the federal-state-ACA stack.
The WI verdict
For a retiree planning withdrawals in 2026, Wisconsin is one of the higher-burden states for retirees, especially on traditional pre-tax withdrawals. A retirement income exclusion from age 67.
Wisconsin allows a retirement-income exclusion of up to $48,000 for a couple from age 67. A traditional→Roth conversion draws on that same exclusion from age 67, so converting inside the cap can cost nothing at the state level.
Worked example: $30k Roth conversion in Wisconsin
Consider a married couple age 58 in Wisconsin with $75,000 of taxable income, both on ACA Marketplace coverage. They want to convert $30,000 from a traditional IRA to a Roth. The Wisconsin state tax on that conversion is approximately $2,295 — Wisconsin's $48,000 retirement-income exclusion does not extend to conversion income at this age, so the full amount is taxed at 7.65%. Federal tax at the 22% bracket adds another $6,600. And because the conversion pushes their MAGI to $105,000 — over the 400% FPL cliff of $84,600 — they lose their full ACA premium tax credit, roughly $12,000. Total cost of the $30,000 conversion: about $20,895, or an effective 69.7% marginal rate. That state figure uses Wisconsin's top bracket rate, so read it as a ceiling: a household whose income lands in a lower bracket pays less, and Wisconsin's own deductions reduce it further. The federal-state-ACA stack matters in Wisconsin.
Cost breakdown
| Component | Amount |
|---|---|
| Federal income tax (22% bracket) | $6,600 |
| Wisconsin state income tax | $2,295 |
| ACA premium tax credit clawback | $12,000 |
| Total cost on $30,000 conversion | $20,895 (69.7% effective) |
Scenario B (high-tax): cliff-protective $15k conversion in Wisconsin
A Wisconsin couple aged 58 with $66K MAGI, both on a Silver-tier Marketplace plan converts only $15,000 because crossing the 400% FPL cliff in Wisconsin layers state tax, federal tax at 22%, AND a ~$12,000 PTC clawback on top of each other. State tax on $15k: $1,148 — Wisconsin's $48,000 retirement-income exclusion does not extend to conversion income at this age, so the full amount is taxed at 7.65%. Federal tax: $3,300. PTC preserved. Effective rate: 29.6%. In a high-tax state, the optimization is small annual conversions over many years — never a single 'big year' if Marketplace coverage is in play.
What the Monte Carlo data says about Wisconsin
QuantCalc Research ran a 30-year, 10,000-path Monte Carlo simulation for an identical representative retiree (age 60, $2M starting balance, 60/40 portfolio, $80K real annual spend) in each of the 51 U.S. jurisdictions. Here's how Wisconsin compared to the best- and worst-case states:
| Metric | Wisconsin | Wyoming (best) | California (worst) |
|---|---|---|---|
| 30-year success rate | 72.11% | 77.11% | 69.03% |
| Rank (of 51) | #44 | #1 | #51 |
| Median lifetime state tax (30y) | $96,390 | $0 | $154,980 |
| Median total tax (30y) | $314,790 | $218,400 | $373,380 |
| Median terminal balance | $835,576 | $999,751 | $695,612 |
| Δ success vs Wyoming | -5.00 pp | — | −8.08 pp |
Sources: QuantCalc 51-State Monte Carlo Study (2026-05-12) — 510,000 total paths, methodology fully documented and dataset released CC-BY-4.0. Wisconsin's row in the dataset uses the same portfolio + spend + retirement age as every other state — the only variable is state tax treatment.
How Wisconsin treats capital gains in retirement
Wisconsin taxes long-term capital gains as ordinary income at the same top bracket rate (7.65%). That stacks on top of federal LTCG (0%/15%/20%) and the 3.8% NIIT for high earners. A 'free' federal 0% LTCG harvest still costs you up to 7.65% at the state level — meaningful in this jurisdiction, particularly during Roth-conversion years when your MAGI is already elevated.
Why the ACA cliff hits hard in Wisconsin
The 400% federal-poverty-level cliff is federal, not state-specific — but its dollar impact depends on the benchmark Silver-plan premium in your county. Wisconsin's Marketplace pricing and your household composition determine the size of the subsidy at risk. A two-person household near 400% FPL can easily have $10,000–$15,000 of annual premium tax credit on the line. Under the OBBBA 2026 restoration of the cliff, $1 of additional MAGI above 400% FPL eliminates the entire credit.
For 2026 the 400% FPL threshold is:
- Household of 1: $62,600
- Household of 2: $84,600
- Household of 3: $106,600
- Household of 4: $128,600
Optimal Roth conversion strategy for Wisconsin
The WI-specific playbook depends on tier:
- Identify your cliff distance. Compute MAGI from all income sources (wages, capital gains, interest, dividends, traditional withdrawals). Find your headroom under 400% FPL. Use the live cliff widget above for a quick check.
- Stay under the cliff if you can. In Wisconsin at 7.65%, the marginal cost of going over the cliff is federal tax + state tax + full PTC clawback. The break-even conversion size is smaller than in tax-free states.
- If you must go over, convert big. Once you've crossed the cliff, additional conversion dollars only cost federal + state tax (no incremental PTC loss). A "rip the bandage" conversion year can be efficient if you have many traditional dollars to move.
- Coordinate with capital gains and the 0% LTCG bracket. Wisconsin taxes long-term capital gains as ordinary income at the same top bracket rate (7.65%). That stacks on top of federal LTCG (0%/15%/20%) and the 3.8% NIIT for high earners. A 'free' federal 0% LTCG harvest still costs you up to 7.65% at the state level — meaningful in this jurisdiction, particularly during Roth-conversion years when your MAGI is already elevated.
- Plan ahead for IRMAA. The IRMAA Medicare premium surcharge has a 2-year lookback. A Wisconsin resident in their early 60s converting today will see IRMAA implications at 65. See RMD + IRMAA calculator for the lookback math.
State tax basics for Wisconsin retirees
| Question | Wisconsin |
|---|---|
| State income tax | 7.65% top marginal |
| Number of brackets | 4 |
| Social Security taxed | No |
| 401(k) / Traditional IRA taxed | Yes |
| Retirement-income exclusion (couple) | $48,000 from age 67 |
| Roth conversion draws that exclusion | Yes |
| State estate / inheritance tax | No |
| Retirement-friendliness tier | high tax |
| Notable feature | a retirement income exclusion from age 67 |
| 30-yr MC success rate (rank) | 72.11% (#44/51) |
| Median 30-yr state tax | $96,390 |
Model your full Wisconsin retirement scenario
Free 10,000-path Monte Carlo with state-specific tax engine, ACA cliff, Roth conversion optimizer, IRMAA lookback — all in your browser, no signup.
Run a free simulation →Related calculators and reading
- All-states retirement tax comparison — see Wisconsin alongside the other 50 jurisdictions.
- State Retirement Tax Data 2026 — the per-jurisdiction rate, exclusion and Social Security figures behind this page, as CSV and JSON.
- ACA Subsidy Cliff Optimizer — find the largest Roth conversion that keeps you under 400% FPL.
- Roth Conversion Optimizer — bracket-fill vs. fixed-amount strategy comparison.
- RMD + IRMAA Calculator — Medicare premium surcharge based on 2-year-old MAGI.
- Safe Withdrawal Rate Calculator — sequence-of-returns-aware withdrawal planning.
- Research: 51-State 30-year Monte Carlo (2026) — full ranking and dataset.
- Research: Monte Carlo ACA Cliff 2026 — 80,000-path study of the cliff cost.
FAQ
Does Wisconsin tax Roth conversions?
Wisconsin taxes Roth conversions as ordinary income at the state level. A $30,000 conversion by a couple aged 58 costs about $2,295 in state tax alone — Wisconsin's $48,000 retirement-income exclusion does not extend to conversion income at this age, so the full amount is taxed at 7.65% — on top of federal tax and any ACA subsidy clawback. That state figure uses Wisconsin's top bracket rate, so read it as a ceiling: a household whose income lands in a lower bracket pays less, and Wisconsin's own deductions reduce it further.
What is Wisconsin's 30-year Monte Carlo retirement success rate?
In QuantCalc's 510,000-path Monte Carlo study, a representative retiree in Wisconsin (age 60, $2M balance, 60/40 portfolio, $80K real spend) finished 30 years at 72.11% success rate — ranked #44 of 51 jurisdictions. Median 30-year state tax: $96,390. Median terminal balance: $835,576.
What is the ACA cliff in Wisconsin for 2026?
The ACA premium-tax-credit cliff is a federal threshold, not state-specific. For a household of two in 2026, it sits at 400% of the federal poverty level — $84,600. Crossing it by even $1 of MAGI eliminates the full subsidy under the OBBBA 2026 rules.
Is Wisconsin a good state to retire for tax purposes?
Wisconsin is one of the higher-burden states for retirees, especially on traditional pre-tax withdrawals. A retirement income exclusion from age 67. In our Monte Carlo ranking it placed #44 of 51 jurisdictions.
Does Wisconsin tax Social Security benefits?
No — Wisconsin does not tax Social Security benefits at the state level, at any income level.
Does Wisconsin tax 401(k) and IRA withdrawals?
Yes — Wisconsin taxes 401(k) and traditional IRA withdrawals as ordinary income, at a top bracket rate of 7.65%. A retirement-income exclusion of up to $48,000 for a couple from age 67 reduces the amount that reaches the state tax base.
Does Wisconsin have a state estate or inheritance tax?
No — Wisconsin does not impose a state-level estate or inheritance tax.
How does Wisconsin tax capital gains?
Wisconsin taxes long-term capital gains as ordinary income at the same top bracket rate (7.65%). That stacks on top of federal LTCG (0%/15%/20%) and the 3.8% NIIT for high earners. A 'free' federal 0% LTCG harvest still costs you up to 7.65% at the state level — meaningful in this jurisdiction, particularly during Roth-conversion years when your MAGI is already elevated.
Last updated 2026-08-23. State income tax figures reflect the 2026 schedule published by Wisconsin's tax authority. ACA poverty-level figures from HHS 2026 Federal Register. Monte Carlo numbers from the QuantCalc 51-state research drop (2026-05-12, CC-BY-4.0). This page is educational. Not tax, legal, or financial advice — consult a qualified advisor.