Roth Conversion Calculator
Convert traditional IRA to Roth — see the tax cost vs lifetime tax savings.
Conversion wins
$54,176
Conversion wins when future bracket ≥ current. Pay the conversion tax with outside money to maximize Roth growth. Watch for IRMAA Medicare premium spike if you convert too much.
A Roth conversion moves money from a pre-tax traditional IRA or 401(k) into a Roth account. You pay ordinary income tax on the converted amount in the year of the conversion, and in exchange the money grows and is later withdrawn tax-free.
This calculator weighs the upfront tax cost against the long-term benefit: tax-free growth, no future required minimum distributions on the Roth, and potentially lower taxes later. The core question is whether your tax rate today is lower than the rate you expect to pay in the future.
Conversions are most attractive in lower-income years, such as early retirement before Social Security and RMDs begin, when you can fill up the lower brackets at a known, modest rate.
How this calculator works
The converted amount is added to your taxable income for the year and taxed at your marginal ordinary income rate. The calculator estimates that tax, then projects the future value of the converted balance growing tax-free versus leaving it in the traditional account where withdrawals would be taxed later. For example, converting $50,000 while in the 22% bracket costs about $11,000 in tax this year; if that $50,000 then grows to $100,000 and is withdrawn tax-free, you avoid tax on the full $100,000 rather than paying tax on it as a traditional withdrawal. The conversion wins when the future tax avoided exceeds the tax paid today, adjusted for the fact that paying tax now reduces money that could otherwise compound.
What affects the number
- Current vs. future bracket: conversions pay off when today's rate is lower than your expected future rate; they can backfire if the reverse is true.
- Bracket creep: a large conversion can push part of the converted amount into a higher bracket, so many people convert in smaller annual chunks.
- IRMAA surcharges: higher income from a conversion can raise your Medicare Part B and Part D premiums about two years later.
- The 5-year rule on conversions: each converted amount must generally stay in the Roth for five years to avoid a 10% penalty on that amount if you are under 59.5.
- Paying the tax: it is usually best to pay the conversion tax from outside funds, not from the IRA itself, so the full balance keeps compounding.
- Other income effects: added income can affect the taxation of Social Security, capital gains rates, and income-based deductions or credits.
Frequently asked questions
How much tax will I pay on a Roth conversion?
The converted amount is taxed as ordinary income in the year you convert. If you convert $40,000 and it lands in the 24% bracket, you owe roughly $9,600 in federal tax, plus any state income tax. Because the conversion adds to your income, part of it can be taxed at a higher rate than your starting bracket.
When does a Roth conversion make sense?
A conversion makes the most sense when your current tax rate is lower than the rate you expect in retirement. Common windows are low-income years, early retirement before Social Security and required minimum distributions start, or a year with unusually low earnings. It is less attractive if converting would push you into a much higher bracket.
What is the 5-year rule for Roth conversions?
Each conversion starts its own five-year clock. If you are under 59.5 and withdraw converted funds before that five-year period ends, you may owe a 10% penalty on the amount, even though you already paid income tax on it. This rule is separate from the five-year rule that applies to earnings.
Can a Roth conversion increase my Medicare premiums?
Yes. Medicare uses a two-year lookback, so a large conversion this year can raise your Part B and Part D premiums through IRMAA surcharges about two years later. Spreading conversions over several years and staying under the IRMAA income thresholds can help you avoid or reduce those surcharges.
Is there a limit on how much I can convert?
No. There is no dollar cap or income limit on Roth conversions, so you can convert as much as you want in a given year. The practical limit is tax: converting too much at once can push you into higher brackets and trigger IRMAA surcharges, which is why many people convert gradually.
This calculator provides general estimates for educational purposes only and is not financial, tax, or investment advice. Your actual results depend on your specific situation, tax rules, market returns, and the current year's IRS limits.