Roth Conversion Calculator
See whether converting your Traditional IRA to a Roth makes financial sense for your situation.
Your Details
Traditional May Be Better
$-1,234
Net benefit at retirement (20 years)
Tax Cost Now
$13,819
Break-Even
N/A
Sweet Spot
$34,050
Stay in Your Current Bracket
Converting $34,050 would keep you in the same tax bracket, minimizing the marginal rate on the conversion.
Conversion Tax Cost
At Retirement (Age 65)
Medicare IRMAA Warning
This conversion could push your MAGI above the IRMAA threshold, increasing Medicare Part B/D premiums by $500-$3,000+ per year.
Pro-Rata Rule Applies
You have remaining pre-tax IRA funds. The pro-rata rule means you can't convert only after-tax dollars — the conversion is proportionally taxed.
Disclaimer
- Based on projected 2026 tax brackets.
- Assumes constant tax rates and returns — actual results will vary.
- Does not account for RMDs, state-specific Roth rules, or 5-year rule.
- Consult a financial advisor for personalized Roth conversion analysis.
What Is a Roth Conversion?
A Roth conversion moves money from a Traditional IRA or 401(k) into a Roth IRA. You pay income tax on the converted amount now, but all future growth and withdrawals are tax-free. The key question: is paying tax now worth the tax-free growth later?
When a Roth Conversion Makes Sense
Converting is most advantageous when your current tax rate is lower than your expected rate in retirement. Common situations where conversion wins:
- Gap years — between jobs, sabbatical, or early retirement before Social Security kicks in
- Low income years — starting a business, graduate school, or part-time work
- Young age with long horizon — decades of tax-free compounding
- High future tax rates — large Traditional balances that will create big RMDs
- Estate planning — Roth IRAs have no RMDs for the original owner, and inherited Roths grow tax-free for 10 years
The "Sweet Spot" Strategy
Rather than converting everything at once, many advisors recommend converting just enough each year to "fill up" your current tax bracket. For example, if you're in the 22% bracket with $20,000 of room before the 24% bracket, converting $20,000 keeps the tax rate low. Repeat each year for a "Roth conversion ladder."
Roth Conversion Pitfalls
| Pitfall | Why It Matters |
|---|---|
| Medicare IRMAA | Conversion income can spike MAGI, increasing Medicare Part B/D premiums 2 years later |
| Pro-Rata Rule | If you have both pre-tax and after-tax IRA funds, you can't choose to convert only after-tax money |
| 5-Year Rule | Each conversion has its own 5-year clock before earnings can be withdrawn penalty-free |
| ACA Subsidy Loss | Added income may reduce or eliminate marketplace health insurance subsidies |
Roth Conversion vs Backdoor Roth
A "backdoor Roth" is a specific strategy for high earners who exceed Roth IRA income limits: contribute to a non-deductible Traditional IRA, then immediately convert to Roth. This is different from converting an existing Traditional IRA with pre-tax funds, which triggers a tax bill.
IRS — Roth IRA Information→Frequently Asked Questions
Can I undo a Roth conversion?
No. As of the Tax Cuts and Jobs Act (2018), recharacterization of Roth conversions is no longer allowed. Once converted, it's permanent — so plan carefully.
Should I pay conversion taxes from the IRA itself?
Ideally, no. Paying taxes from outside funds (savings, taxable accounts) lets the full converted amount grow tax-free. Using IRA funds to pay taxes reduces the amount converted and, if under 59½, triggers a 10% penalty on the portion used for taxes.
What about state taxes?
Most states tax Roth conversions as ordinary income. Some states (like Florida, Texas, Nevada) have no income tax, making conversion especially attractive. A few states offer partial exclusions for retirement income.
Want to see how your 401(k) and IRA fit together? Try our 401(k) Calculator and Federal Tax Calculator.