Roth Conversion Calculator
A Roth conversion moves money from a traditional IRA to a Roth IRA. You pay taxes now on the converted amount — but all future growth and withdrawals are tax-free. It's worth doing when your current tax rate is lower than your expected retirement tax rate.
Enter your conversion amount, tax rates, and time horizon to see the upfront tax cost, after-tax value at retirement, and whether conversion makes financial sense for you.
| Year | Roth (after-tax) | Traditional (after-tax) | Roth Lead |
|---|
How Roth Conversions Work
A traditional IRA is funded with pre-tax dollars and taxed at withdrawal. A Roth IRA is funded with after-tax dollars and grows and withdraws tax-free. A Roth conversion bridges the two: you take pre-tax money in a traditional IRA, pay ordinary income tax on it now, and move it to a Roth IRA where it grows tax-free forever.
The conversion decision is fundamentally a tax rate bet: you're paying taxes at your current rate to avoid taxes at your future retirement rate. If you expect to be in a higher bracket in retirement — because of Social Security income, RMDs pushing up your income, or rising tax rates in general — paying a lower rate now is a win. If you expect a lower rate in retirement, keeping the money in the traditional IRA and paying taxes later is better.
The Math: Why Rate Differential Matters
The key insight is that the conversion advantage grows with both the rate differential (retirement rate minus current rate) and the compounding period. Converting $50,000 at 22% current rate to avoid 28% in retirement looks like a 6-percentage-point savings. But that 6-point savings compounds on 20 years of growth. The larger the growth, the larger the tax savings in absolute dollars.
| Current Rate | Retirement Rate | Roth Value | Trad. Value | Roth Wins By |
|---|---|---|---|---|
| 22% | 28% | $193,484 | $139,228 | +$54,256 |
| 22% | 22% | $193,484 | $150,917 | +$42,567 |
| 24% | 22% | $186,386 | $150,917 | +$35,469 |
| 28% | 22% | $175,186 | $150,917 | +$24,269 |
Even Same-Rate Conversions Often Win
Notice in the table above: even converting at the same current and retirement rate (22% to 22%), the Roth wins by $42,567 on a $50,000 conversion. This seems counterintuitive — but the reason is that you're paying the tax on $50,000 now. In the traditional IRA, the tax applies to the entire grown balance of $193,484 at withdrawal. Same rate, but applied to a much larger base. The Roth wins because you "pre-pay" tax on the smaller original amount.
When NOT to Convert
Roth conversion is counterproductive if: (1) you have to withdraw from the IRA itself to pay the taxes (reducing the invested amount), (2) your current tax rate is significantly higher than expected retirement rate, (3) you'll need the funds within 5 years (Roth has a 5-year rule), or (4) the conversion pushes you into a higher bracket that triggers Medicare IRMAA surcharges or makes Social Security benefits taxable. Always model the full income picture before converting.
For context on how Roth conversions interact with your overall retirement income plan, see our guide on when Roth conversions make sense. To see how RMDs interact with conversion strategy, the RMD Calculator shows your required withdrawals and how they affect taxable income.
Frequently Asked Questions
What is a Roth conversion?
A Roth conversion moves money from a traditional IRA (or 401k) to a Roth IRA. The converted amount is added to your taxable income in the conversion year — you pay income taxes on it now. In exchange, the money grows tax-free and all qualified future withdrawals are tax-free, with no required minimum distributions.
When does a Roth conversion make sense?
When your current marginal rate is lower than your expected retirement rate, you have outside funds to pay the taxes (not from the IRA), you have many years for tax-free growth to compound, or you want to reduce future RMDs. Even conversions at the same tax rate often win because you pre-pay tax on the smaller current amount instead of the larger grown balance later.
How much tax will I owe on a Roth conversion?
The converted amount is added to ordinary income. Tax = converted amount × marginal rate on that additional income. Converting $50,000 in the 22% bracket costs approximately $11,000 in federal taxes. Always check if the conversion pushes you across bracket boundaries — the marginal rate changes at each threshold.
Can I convert just part of my traditional IRA?
Yes — partial conversions are common and often more tax-efficient. Converting only enough to fill your current bracket without spilling into the next one maximizes the rate differential advantage. Many advisors recommend annual partial conversions over 5–10 years rather than one large conversion.
What is the Roth conversion deadline?
December 31 of the conversion year — not the tax filing deadline. Conversions are irreversible (recharacterizations were eliminated in 2017). Always complete conversions by December 31 of the year you want them to count for that tax year.
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