Roth Conversion Calculator

Enter the amount and tax assumptions

Start with the retirement-account amount you are considering converting. Enter the tax-free basis allocated to that amount, if any, using a properly prepared tax calculation. Do not assume you can select only after-tax dollars from a traditional IRA while ignoring other IRA balances. IRS Form 8606 instructions explain how basis and conversions are reported.

Enter the effective incremental tax rate on the taxable conversion, including applicable state effects if you have estimated them. This is the additional tax caused by the conversion divided by its taxable amount. A large conversion can cross brackets, so your current marginal bracket alone may be an incomplete input.

Then enter the future tax rate assumed on a taxable traditional withdrawal, the annual retirement-account return, the after-tax return on outside cash, and the number of years until the comparison date. These are scenarios, not forecasts of future law or investment performance.

Continue with SEP IRA Contribution Calculator or Solo 401(k) Contribution Calculator for the next calculation.

How the two paths stay comparable

In the conversion path, the entire modeled account amount moves to Roth and grows at the entered return. Conversion tax is paid from separate cash. The future Roth value is treated as tax-free only under the assumption that the eventual withdrawal qualifies.

In the no-conversion path, the retirement balance grows at the same rate. The model subtracts the assumed tax on its taxable future value, while keeping any entered basis as a fixed dollar amount. It also grows the outside cash that would otherwise have paid the conversion tax.

Including that outside cash is essential. Comparing a full Roth balance with an after-tax traditional balance while ignoring the conversion tax's opportunity cost would favor conversion unfairly. Both paths must start with the same resources.

Example: a close result despite a higher current tax rate

Assume $50,000 of fully pretax funds, a 24% incremental conversion tax rate, a 20% future withdrawal tax rate, and a 10-year horizon. Both retirement paths earn an illustrative 6% per year. The $12,000 of cash needed for conversion tax could instead earn 4% annually after tax.

That small difference is sensitive to assumptions. A different outside return, actual tax impact, or withdrawal pattern can reverse it. The example does not establish that converting is appropriate; it shows why comparing only tax brackets can miss part of the calculation.

Interpret the result before acting

Try several future tax rates and growth assumptions. The break-even future tax rate is the rate that makes the modeled paths equal. It is a mathematical threshold for this scenario, not a prediction of your future tax bracket.

Also consider whether conversion income changes other parts of your finances, such as income-based benefits, deductions, credits, or Medicare premiums. Those effects are not calculated here and may belong in the incremental tax input or a broader tax projection.

Use the retirement withdrawal calculator to examine spending from the resulting portfolio. The fixed-period annuity calculator offers a separate fixed-horizon payment model; it does not resolve a conversion's tax treatment.

Important limits

This comparison assumes tax is paid outside the retirement account, no interim withdrawals, and one future withdrawal of the modeled traditional balance. It does not calculate required minimum distributions, annual tax brackets, estate outcomes, early-distribution taxes, or changing state residency.

Roth withdrawal qualification and conversion-related five-year rules need separate attention. IRS Publication 590-B distinguishes these rules. A conversion is not an assurance that every immediate withdrawal will be free of tax or additional tax.

Frequently asked questions