Roth Conversion Calculator
Estimate the tax to convert a Traditional IRA/401k to Roth and compare the after-tax outcome of converting now versus doing nothing. Runs in your browser.
Convert vs do nothing
- Tax owed to convert now
- $22,000
- Roth value in 20 yr (tax-free)
- $250,157
- Traditional after-tax in 20 yr
- $243,742
Converting comes out $6,414 ahead (after-tax, this scenario)
Simplified: it assumes the conversion tax is paid from the account and a single flat rate each period. Converting wins when your future rate is higher than today's (or you pay the tax from outside funds). It ignores bracket-fill effects (a large conversion can push you into higher brackets), IRMAA Medicare surcharges, the 5-year rule, state taxes, and RMDs. Estimate only — not tax advice; consult a CPA.
About this tool
Converting pre-tax retirement savings (Traditional IRA or 401k) to a Roth means paying income tax now in exchange for tax-free growth and withdrawals later. Whether that pays off hinges on one comparison: your tax rate today versus your expected rate when you would otherwise withdraw. This calculator estimates the tax due to convert (the balance times your current marginal rate) and then projects the after-tax value two ways — the Roth growing tax-free after the conversion tax, versus leaving it in the Traditional account to grow and be taxed at your future rate on withdrawal. Done apples-to-apples (tax paid from the account), converting wins whenever your future rate is higher than today's, and it is even more attractive if you can pay the conversion tax from outside funds. The model is deliberately simplified and lists what it omits — bracket-fill effects from a large conversion, IRMAA Medicare surcharges, the Roth 5-year rule, state taxes, and required minimum distributions — all of which can change the answer. It is informational, not tax advice; consult a CPA. Everything runs in your browser.
How to use it
- Enter the Traditional balance you'd convert.
- Enter your current marginal rate and your expected future rate.
- Set the years until withdrawal and an expected return.
- Compare the after-tax outcomes; converting wins when future rate > current rate.
Frequently asked questions
- When does a Roth conversion make sense?
- Broadly, when you expect your tax rate in retirement (or at withdrawal) to be higher than it is now — for example in a low-income year, early retirement before RMDs and Social Security, or if you expect rates to rise. Paying tax at a lower rate now beats paying more later.
- How is the conversion tax calculated?
- The amount you convert is added to your taxable income for the year, so roughly tax = converted amount × your marginal rate. This tool uses a single flat rate; in reality a large conversion can span several brackets, which raises the effective rate.
- Should I pay the conversion tax from the IRA or from savings?
- From outside savings if possible. Paying the tax with non-retirement money lets the full balance keep growing tax-free, substantially improving the outcome. Paying it from the IRA (and before 59½, possibly a penalty) reduces the benefit — this tool models tax paid from the account, the conservative case.
- What is the Roth 5-year rule?
- Each conversion has its own 5-year clock; withdrawing converted principal before 5 years (and before 59½) can trigger a 10% penalty. Converted funds are not as liquid as they seem, which matters for near-term needs.
- What does this calculator leave out?
- Bracket-fill effects, IRMAA Medicare premium surcharges triggered by higher income, state income taxes, RMDs, and the timing of multiple partial conversions. These can meaningfully change the result, so treat the output as a first approximation.
- Is this tax advice?
- No. It is an informational estimate. Roth conversions have significant, situation-specific tax consequences — consult a CPA or financial planner before converting.