Roth Conversion Calculator
Compare the tax implications of converting Traditional IRA to Roth
When should I do a Roth conversion?
A Roth conversion makes sense when your current tax rate is lower than your expected rate in retirement. You pay taxes on the converted amount now, but future growth and withdrawals are tax-free. Best opportunities include low-income years, market downturns, or if you expect higher taxes in retirement.
- No limit on conversion amounts, but large conversions may push you into higher brackets
- Conversions are beneficial when current tax rate < expected retirement rate
- Each conversion has its own 5-year clock: withdrawing the converted (taxable) amount within 5 years and before 59½ triggers the 10% penalty. Earnings are tax-free only after your first Roth contribution's 5-year period and at 59½ (or disability, death or a first home)
- Consider spreading conversions over multiple years to manage tax brackets
Source:IRS Publication 590-A
A Roth conversion is a strange transaction — you voluntarily pay tax today to avoid paying tax later. It only makes sense if you genuinely believe your future tax rate will be higher than your current one. For most people that's true in retirement (RMDs, Social Security, no more deductions). For some it's the opposite. There's no universal right answer.
Real-world scenario
A $150,000 traditional IRA, converted in a low-income year
A 58-year-old single filer in a gap year between jobs has $40,000 of W-2 income and a $150,000 traditional IRA. Converting $75,000 in 2026 keeps taxable income ($98,900 after the $16,100 standard deduction) under the 22% bracket ceiling. Federal tax on the conversion: about $13,850. Same conversion at age 73 under RMD pressure with full Social Security and a pension: easily 24–32% bracket, costing $18,000–$24,000. The 'gap-year' conversion saves roughly $4,000–$10,000 in lifetime tax.
The part most people miss
The IRA aggregation rule destroys most 'backdoor Roth' strategies. If you have ANY pre-tax IRA balance — traditional IRA, SEP, SIMPLE — the IRS forces a pro-rata calculation on every conversion. The fix: roll the pre-tax IRA into your current 401(k) before December 31. 401(k) balances don't count toward the aggregation calculation. This single move makes the backdoor Roth viable for high earners.
Conversion Details
Tax Rate Assumptions
Conversion May Be Beneficial
Converting could result in $2,376 more in retirement value.
Key insight: Conversion is generally beneficial when your retirement tax rate (24%) is higher than the average rate you pay on the conversion now (22.8%).
Tax Cost of Conversion
Federal tax on a 2026 conversion
$11,386
average 22.8% on the conversion (2026 federal brackets; ignores credits, NIIT, IRMAA and Social Security taxation)
Assumes the whole conversion is pretax (no nondeductible basis in any traditional, SEP or SIMPLE IRA). With basis, Form 8606's pro-rata rule makes part of it tax-free.
Tax Bracket Warning: This conversion pushes you from the 22% bracket to the 24% bracket. Consider splitting across multiple years.
Value After 20 Years
Keep in Traditional
$193,484
Pre-tax
After 24% tax
$147,048
Convert to Roth
$193,484
Tax-free
Tax paid now
-$11,386
Annual Retirement Income
Traditional (after tax)
$5,882/yr
Roth (tax-free)
$7,739/yr
Roth Conversion Strategies
Pay Tax Externally
Pay conversion tax from non-retirement funds to maximize the amount growing tax-free in your Roth.
Convert in Low-Income Years
Job loss, sabbatical, or early retirement can create low-tax-bracket opportunities for conversion.
Spread Across Years
Convert amounts that "fill up" your current tax bracket each year to avoid jumping to higher brackets.
Roth conversions are irrevocable and taxable in the year of conversion. Each conversion has its own 5-year clock: withdrawing the converted (taxable) amount within 5 years and before 59½ triggers the 10% penalty. Earnings are tax-free only after your first Roth contribution's 5-year period and at 59½ (or disability, death or a first home) — see the Roth 5-year rule calculator. This calculator provides estimates only— consult a tax professional before making conversion decisions, especially for large amounts or complex situations.
Related Tools & Guides
Sources & References
Primary references used for this content
Contributions to IRAs
IRA contribution limits, deductibility, and phase-outs
View on irs.gov
Distributions from IRAs
RMDs, inherited IRAs, and distribution taxation
View on irs.gov
Nondeductible IRAs
Basis tracking and the pro-rata conversion rule
View on irs.gov
✓3 primary sources; links re-checked on a weekly rotation by the source watcher
Disclaimer: This calculator provides estimates for educational purposes only. Not tax, legal, or financial advice. Results may vary based on your specific circumstances. Consult a qualified CPA or tax professional for personalized guidance.