Roth Conversion Calculator

Analyze the tax impact of converting Traditional IRA or 401(k) funds to a Roth account. This calculator projects your retirement savings in two scenarios—with and without a conversion—to show you the upfront tax cost, the potential for future tax savings, and the long-term net benefit. Enter your account balances, income, and conversion strategy to see if paying taxes now is better than paying them later.

This tool is for anyone considering a Roth conversion to create tax-free income in retirement, reduce future Required Minimum Distributions (RMDs), or optimize their estate plan. It helps you decide not just if you should convert, but how much to convert. For a broader comparison of account types, see our guide on Roth vs. Traditional IRAs or use the main Roth IRA calculator.

The results provide a Roth Conversion Score, a detailed breakdown of the tax cost, the net lifetime benefit, and your RMD reduction. Charts visualize how the conversion impacts your portfolio's after-tax value over time and changes the mix of your tax-deferred vs. tax-free assets at retirement.

Begin by entering your timeline in the "Personal Details" section: your current age, planned retirement age, and life expectancy. Your filing status (Single or Married Filing Jointly) is critical as it determines the federal tax brackets used to calculate the conversion tax.

Next, input your "Account Balances." Provide your current Traditional IRA or 401(k) balance (the source of the conversion) and your existing Roth IRA balance. The calculator will project the growth of these accounts over time.

Then, define your "Conversion Strategy." You can model a one-time, lump-sum conversion or an annual conversion ladder. For a one-time conversion, enter the total amount. For an annual strategy, specify the amount to convert each year and the number of years you'll perform conversions. Spreading conversions out can help you avoid jumping into a higher tax bracket.

In the "Tax Information" section, enter your current taxable income before the conversion. The calculator adds the conversion amount on top of this to estimate the tax. Also include your standard or itemized deduction, your expected retirement income (to compare future tax rates), and your state's income tax rate.

Finally, you can open the "Advanced Settings" to fine-tune the projection. Here you can adjust the expected investment return, inflation rate, and your annual withdrawal needs in retirement. Crucially, you can also specify the "Tax Payment Source"—whether you'll pay the conversion tax from an outside brokerage account (optimal) or from the converted funds themselves.

Personal Details (Age, Filing Status)

Your timeline—current age, retirement age, and life expectancy—determines the window for conversions and the length of your retirement. Filing status is essential for applying the correct federal tax brackets. A married couple has wider tax brackets, allowing for a larger conversion at a lower marginal rate compared to a single filer with the same income.

Account Balances

Your Traditional IRA / 401(k) balance is the pre-tax money available to be converted. Your Roth IRA balance is the destination for the converted funds and serves as a starting point for the Roth portion of your portfolio. The calculator projects the growth of both accounts.

Conversion Strategy

This section models how you execute the conversion. A "One-Time" strategy converts a large sum in a single year, which is useful if you have an unusually low-income year. An "Annual (Ladder)" strategy involves converting smaller, consistent amounts over several years. This is a common technique to "fill up" lower tax brackets each year without triggering a much higher rate. This is the basis of the Roth conversion ladder used by many early retirees.

Tax Information

Your current taxable income sets the baseline for calculating the conversion tax. The conversion amount is treated as ordinary income and added to this number. The standard deduction reduces your taxable income before the tax is calculated. Your expected retirement income helps the calculator assess whether your tax rate is likely to be higher or lower in the future—a key factor in the conversion decision. The state tax rate adds another layer to the total tax cost. Some states have no income tax, making conversions cheaper. See the best states to retire for taxes.

Growth & Withdrawals (Advanced)

The expected annual return projects how your investments will grow. A higher return magnifies the long-term benefit of tax-free Roth growth. The inflation rate is used to model the future purchasing power of your money. The annual withdrawal in retirement simulates how you will draw down your portfolio, affecting the final balances. The RMD Start Age (typically 73 or 75) is when the IRS requires you to take taxable withdrawals from traditional accounts. Use the RMD calculator to estimate these withdrawals.

Tax Payment Source (Advanced)

This is a critical input. Paying the conversion tax from "Outside Funds" (like a taxable brokerage account) is the most efficient method. It allows the full conversion amount to move into the Roth IRA and grow tax-free. Paying the tax "From Conversion" means a portion of the converted money is immediately withheld for taxes, reducing the amount that benefits from tax-free growth.

The calculator's core function is to run two parallel, year-by-year simulations from your current age to your life expectancy.

Scenario 1: The Conversion Plan. In this simulation, the calculator applies your chosen conversion strategy. Each year a conversion occurs, it adds the conversion amount to your taxable income, calculates the federal and state tax due, and subtracts that tax either from your outside brokerage account or the newly converted Roth funds. It moves the net amount from the traditional balance to the Roth balance. It then grows both balances by the expected rate of return. In retirement, it simulates withdrawals and calculates any Required Minimum Distributions (RMDs) due on the remaining traditional balance.

Scenario 2: The No-Conversion Plan. This simulation acts as a baseline. It assumes you make no conversions. It simply grows your traditional and Roth balances by the expected return each year. In retirement, it calculates the much larger RMDs on the full traditional balance and estimates the taxes due on those withdrawals.

By comparing the final, after-tax value of your portfolio in both scenarios at life expectancy, the calculator determines the "Net Benefit." A positive net benefit suggests the upfront tax cost was a worthwhile investment for achieving greater tax-free wealth in the long run.

The calculator uses a year-by-year projection. The key formulas for each step are outlined below.

Tax Calculation

The calculator uses a progressive tax bracket system. The tax is not a flat rate.

taxable income = max(0, gross income - standard deduction)
total tax = calculated tax on each bracket tier, summed up

Conversion Tax

The tax on the conversion is the additional tax you pay, not the total tax bill for the year.

tax without conversion = calculateTax(current taxable income - deduction)
tax with conversion = calculateTax(current taxable income - deduction + conversion amount)
federal tax on conversion = tax with conversion - tax without conversion
state tax on conversion = conversion amount * (state tax rate / 100)
total conversion tax = federal tax on conversion + state tax on conversion

Account Growth

Each year, the remaining balances in your accounts grow based on your assumed rate of return.

ending balance = starting balance * (1 + expected return / 100)

Required Minimum Distribution (RMD)

For ages 73 and older, RMDs are calculated on traditional balances.

RMD amount = traditional balance at prior year-end / IRS Uniform Lifetime Table factor

After-Tax Value at Life Expectancy

To compare apples to apples, the calculator estimates the after-tax value of all accounts at the end of the projection. Roth balances are worth 100% of their value, while traditional balances are reduced by their estimated future tax liability.

effective tax rate = calculateTax(balance, retirement brackets) / balance
after-tax traditional balance = traditional balance * (1 - effective tax rate / 100)
total after-tax value = roth balance + after-tax traditional balance

Net Benefit

The final net benefit is the difference in after-tax value between the two scenarios.

net benefit = total after-tax value (Convert) - total after-tax value (No Convert)

A Roth conversion is the process of moving money from a traditional, pre-tax retirement account (like a Traditional IRA, 401(k), 403(b), or TSP) into a Roth IRA. The amount you convert is added to your ordinary income for that year and is subject to federal and state income taxes.

Once the money is in the Roth IRA, it grows completely tax-free. Qualified withdrawals in retirement (after age 59½ and after the account has been open for five years) are also 100% tax-free. Furthermore, Roth IRAs do not have Required Minimum Distributions (RMDs) during the original owner's lifetime.

The core trade-off is simple: you choose to pay income taxes on your retirement savings now in exchange for tax-free withdrawals later. This strategy makes sense if you believe your income tax rate will be higher in retirement than it is today. You might expect a higher future tax rate due to a successful career, rising national tax rates, or large RMDs from your traditional accounts.

A Roth conversion ladder is a strategy primarily used by people planning to retire early. It provides a way to access retirement funds before age 59½ without paying the typical 10% early withdrawal penalty.

Here’s how it works:

1. Convert: You convert a specific amount of money from your Traditional IRA to a Roth IRA and pay income tax on the conversion.
2. Wait: You must wait five years. This is due to the IRS's "5-year rule," which applies separately to each conversion.
3. Withdraw: After the five-year period has passed for a specific conversion, you can withdraw the converted amount (the principal, or "basis") from your Roth IRA tax-free and penalty-free, even if you are under age 59½.

By converting a new amount each year, you create a "ladder" of funds that become accessible five years later. For example, the amount you convert in 2026 becomes available in 2031, the amount from 2027 becomes available in 2032, and so on. This provides a steady stream of penalty-free income to bridge the gap until you reach traditional retirement age. For a more detailed guide, see our article on the Roth conversion ladder.

The goal of a smart conversion strategy is to pay the lowest possible tax rate. Here are several ways to achieve that:

• Convert in Low-Income Years: The ideal time to convert is when your taxable income is low. This could be a year between jobs, a year you take a sabbatical, or the gap years after you retire but before you start taking Social Security or RMDs.
• "Fill Up" Your Tax Bracket: Instead of converting a random amount, convert just enough to take you to the top of your current marginal tax bracket without pushing you into the next, higher one. For example, if you have $20,000 of "room" left in the 22% bracket, converting that amount ensures you don't pay 24% on any of it.
• Use an Annual Ladder Strategy: Spreading a large conversion over several years (as modeled in the calculator) is a form of bracket-filling. It's almost always more tax-efficient than a single large conversion that pushes you into the 32%, 35%, or 37% brackets.
• Pay Taxes from an Outside Account: As mentioned, using funds from a taxable brokerage or savings account to pay the conversion tax is crucial. This keeps 100% of your converted funds working for you inside the Roth, maximizing tax-free growth.
• Offset Income with Tax-Loss Harvesting: If you have a taxable brokerage account, you can sell investments at a loss to generate capital losses. You can use these losses to offset up to $3,000 of ordinary income per year, which can help reduce the tax impact of your conversion.

• Roth Conversion Score: This provides a quick summary of the strategy's favorability. A high score indicates a clear financial benefit, while a low score suggests the upfront tax cost may be too high compared to the future savings.
• Total Converted & Tax Cost: These cards show the total amount moved to Roth and the estimated tax bill. The effective tax rate gives you a blended rate for the entire conversion.
• Net Benefit: This is the ultimate bottom line. It shows the projected increase (or decrease) in your after-tax wealth at life expectancy by choosing to convert. A positive number is the goal.
• RMD Reduction: This shows the estimated reduction in your annual RMD at your RMD start age. Lower RMDs mean less forced taxable income in retirement, which can also help you avoid Medicare IRMAA surcharges.
• Convert vs. Don't Convert Chart: This line chart is the most important visual. It shows the trajectory of your after-tax portfolio value in both scenarios. Often, the "Convert" line will dip initially due to the tax payment but will overtake the "Don't Convert" line later in life, demonstrating the power of tax-free growth.
• Account Composition at Retirement: These donut charts show a key benefit: the shift from mostly tax-deferred assets to a much larger pool of tax-free Roth assets, giving you more flexibility in retirement.

If the calculator shows a negative net benefit or a low score, your conversion strategy may be too aggressive. Consider these adjustments:

• Reduce the Annual Conversion Amount: Try converting a smaller amount each year. The goal is to stay within a lower tax bracket (e.g., the 12% or 22% brackets).
• Extend the Conversion Period: Instead of converting over 5 years, try spreading it over 10 or 15 years, especially if you have a large traditional balance.
• Wait for a Lower-Income Year: If your income is high now, the math may not work. Re-run the calculation assuming you convert after you stop working but before Social Security and RMDs begin.
• Ensure You Pay Taxes From Outside Funds: If you were modeling paying taxes from the conversion, switch to "Outside Funds" and see how much the net benefit improves. This is often the single biggest lever you can pull.
• Move to a Tax-Friendly State: If you are considering relocation in retirement, moving from a high-tax state to a no-tax state before doing conversions can save you a significant amount.

1. Converting Too Much at Once: The most common error is converting a large lump sum that pushes you into a much higher tax bracket, negating the potential benefits.
2. Forgetting State Taxes: A 5% or 7% state income tax can add thousands to your conversion tax bill. Always factor this in.
3. Paying Taxes from the Conversion: Using converted funds to pay the tax bill reduces the principal that can grow tax-free, acting as a drag on your long-term results.
4. Misunderstanding the 5-Year Rule: Withdrawing converted funds within five years (if under 59½) can trigger a 10% penalty. Each conversion has its own 5-year clock.
5. Ignoring the Impact on Other Finances: A large conversion increases your Adjusted Gross Income (AGI), which can reduce eligibility for certain tax credits, increase Medicare Part B and D premiums (IRMAA), and make more of your Social Security benefits taxable.