My dad's logic for trying to convert everthing IRA to Roth is that, while my tax bracket may go down over time, the amount of money that is actually IN the accounts (and therefore the amount that will be taxed) will increase with time. I know that converting now instead of later kind of goes against the traditional Roth ladder setup, but I couldn't find the flaw in his logic. What am I missing?

You're missing the commutative property of multiplication. If you're multiplying the same numbers together, it doesn't matter in which order you multiply them.

You're also missing that the number of dollars of tax you pay isn't the important thing, it's the number of dollars you get to keep after you pay your tax.

Suppose you have some amount of pre-tax income

*I* that you want to save for retirement. Suppose your investment will grow by a factor of

*G* by the time you want to withdraw it, your marginal tax rate right now is

*T*_{n}, and your marginal tax rate in retirement will be

*T*_{r}.

If you save in a pre-tax IRA, you put the full

*I* into the IRA. It grows to

*G* *

*I* by the time you want to withdraw, at which time you would have to pay taxes. You get to keep (1 -

*T*_{r}) *

*G* *

*I*.

If you save in a Roth IRA, you pay tax before you contribute, so you only get to put in (1 -

*T*_{n}) *

*I*. It grows by a factor of

*G* by the time you want to withdraw, and the withdrawal is tax-free, so you get to keep (1 -

*T*_{n}) *

*I* *

*G*.

If

*T*_{n} =

*T*_{r}, you get to keep the same amount either way! You paid more tax in the traditional IRA because you waited to pay your tax until after the money grew, but due to the commutative property of multiplication the amount you get to keep is identical given constant tax rates.

If you expect to have a lower tax rate in retirement, you'll get to keep more by contributing to traditional.

As for converting the Rollover IRA to Roth, that's nearly $100k and a whole lotta taxes! So I figured I'd leave that and the 401k as tax-deferred accounts, but work on expanding the tax-free Roth money (largely so I can have more money that I can access before 59.5 yrs old).

I'm not saying you would necessarily convert the whole rollover IRA. Roth conversions aren't an all-or-nothing thing. You can convert a little bit each year if you decide that's a good idea. What I was saying is that converting $1,000 from your SEP IRA to Roth is the same as converting $1,000 from your rollover IRA to Roth. The right amount to convert will almost certainly not be exactly the same as your annual SEP contribution. It may be more or less than this, with $0 being a pretty likely right answer.