Find out whether converting traditional IRA money to a Roth IRA pays off. Enter the amount, your tax rate now and when you withdraw, the years until you need the money and how you would pay the tax. The calculator compares the after-tax value of both paths, shows the break-even year and the future tax rate that makes converting worthwhile.
Last updated:
Conversion
$
Pre-tax traditional IRA money moved to a Roth
years
%
Pay the conversion tax from
Tax rates
%
Federal + state marginal rate
%
Expected marginal rate in retirement
%
On the cash you'd otherwise keep invested
Enter your values to see the result.
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How to use the Roth Conversion Calculator
Enter the amount to convert and the years until you expect to withdraw it.
Set your expected return and choose whether the tax will be paid from cash outside the IRA or withheld from the conversion.
Enter your tax rate now (on the converted amount) and the rate you expect when you withdraw.
Press Compare conversion to see which path leaves more after tax, the break-even and a year-by-year table.
How the comparison works
Let A be the amount converted, tnow the tax rate on the conversion, tlater the rate at withdrawal, r the return and n the years.
Tax paid from outside cash: converting leaves a Roth worth A × (1 + r)n, all tax-free. Not converting leaves A × (1 + r)n × (1 − tlater) in the IRA plus the cash you did not spend on tax, A × tnow, growing in a taxable account at r × (1 − yearly tax).
Tax withheld from the conversion: converting leaves A × (1 − tnow) × (1 + r)n; not converting leaves A × (1 + r)n × (1 − tlater). The growth factor cancels, so converting wins exactly when tlater > tnow (plus any penalty).
The break-even future tax rate is the withdrawal rate at which both paths are equal. Paying from outside cash lowers it below today's rate, because that cash would have been taxed every year.
Example: $50,000 converted, 24% tax now
7% return, 15% yearly tax on outside investments, tax paid from outside cash:
Years
Roth (convert)
Don't convert at 24% later
Break-even future rate
5
$70,128
$69,318
22.85%
10
$98,358
$96,141
21.75%
20
$193,484
$185,172
19.7%
30
$380,613
$357,219
17.85%
Even with the same tax rate now and later, converting wins slightly when you pay the tax from outside money, and the edge grows with time. If your retirement rate drops to 12%, the same 20-year conversion falls about $14,900 behind.
Roth conversion checklist
Fill a bracket, don't jump one: check how much income room is left in your current federal bracket before choosing the amount.
Have cash for the tax: withholding from the conversion shrinks the benefit and can trigger a penalty under 59½.
Mind the pro-rata rule: if you hold both pre-tax and after-tax (basis) IRA money, each conversion is taxed proportionally across all your traditional, SEP and SIMPLE IRAs.
Watch side effects: Medicare IRMAA surcharges, taxation of Social Security, ACA subsidies and state taxes.
Heirs benefit too: inherited Roth IRAs must generally be emptied within 10 years but withdrawals are tax-free, unlike inherited traditional IRAs.
Frequently asked questions
How is a Roth conversion taxed?
The pre-tax amount you convert is added to your ordinary income for that year and taxed at your regular rates, federal and state. There is no 10% penalty on the conversion itself, even under 59½, as long as you do not withhold part of it for taxes.
When does a Roth conversion make sense?
Mainly when your tax rate now is lower than the rate you expect when you withdraw: early retirement years, a low-income or sabbatical year, or a market dip. It also helps if you can pay the tax from money outside the IRA, because that effectively moves more money into a tax-free account.
Why does paying the tax from outside money matter?
If you pay from outside cash, the full converted amount keeps growing tax-free, and the cash you spent would otherwise have been taxed each year in a taxable account. If the tax is withheld from the conversion, converting only wins when your future tax rate is higher than today's.
What is the 5-year rule for conversions?
Each conversion starts its own 5-year period. If you are under 59½ and withdraw converted principal within five years, the 10% penalty applies to that amount. Earnings are tax-free only after age 59½ and once your first Roth has been open five years.
Can I undo a Roth conversion?
No. Recharacterizing a Roth conversion was eliminated by the 2017 tax law, starting with 2018 conversions. Plan the amount carefully, often by converting just enough to fill your current tax bracket.
Does a conversion affect Medicare premiums or other benefits?
It can. The converted amount raises your modified AGI, which can trigger higher Medicare Part B and D premiums (IRMAA) two years later, increase taxation of Social Security benefits and reduce ACA premium credits.
Should I convert all at once or over several years?
Spreading conversions over several years often keeps each year's income in a lower bracket. Many people convert enough each year to reach the top of their current bracket, for example the 12% or 22% bracket.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.