Roth IRA Conversion Calculator

Use the form below to test whether converting Traditional IRA money to a Roth IRA could improve your long-term after-tax outcome. Enter the conversion amount, age, tax rates, expected return, and how you plan to pay the conversion tax so the calculator can compare the tax cost now with potential tax-free growth later.

Roth conversion decisions are sensitive to future tax rates, investment returns, Medicare IRMAA, ACA subsidies, state taxes, and withdrawal timing. Run conservative and optimistic scenarios, then review the result with a qualified tax professional before acting.

How to use: Introduction: How the conversion comparison works

A Roth conversion moves pre-tax retirement money into a Roth account. The converted amount is taxable in the year of conversion, but qualified Roth withdrawals can be tax-free later. The calculator estimates the tax due now, grows the Roth balance to retirement, and compares that future Roth value with the after-tax value of leaving the same amount in a Traditional IRA.

The model also accounts for how the conversion tax is paid. Paying the tax from outside non-retirement funds keeps the full conversion amount invested in the Roth. Paying from the converted amount reduces the Roth principal immediately, which can materially reduce the long-term benefit.

The future comparison then grows the Roth balance and the Traditional IRA balance to the selected retirement age. The Traditional IRA result is reduced by the expected retirement tax rate because withdrawals from that account are still taxable.

Inputs that change the decision

The current marginal tax rate is the rate applied to the conversion income today. The expected retirement tax rate is the rate you believe would apply to Traditional IRA withdrawals later. A conversion is easier to justify when today's rate is lower than the future withdrawal rate, when the money has many years to compound, or when avoiding future required minimum distributions is valuable.

The return assumption controls how much time magnifies the tax tradeoff. A higher expected return gives the Roth more tax-free growth, but it also makes the Traditional IRA larger. That is why the comparison should be run with low, moderate, and high return assumptions instead of a single optimistic number.

Worked example

Suppose a 50-year-old converts $50,000, pays a combined current tax rate of 29 percent, expects a 22 percent retirement tax rate, and assumes 7 percent annual growth until age 65. The conversion creates a $14,500 tax bill today. If that tax is paid from outside funds, the entire $50,000 can grow inside the Roth. If the tax is withheld from the conversion, only $35,500 starts compounding in the Roth, which changes the result substantially.

The same conversion can look attractive in a low-income year and unattractive after bonuses, capital gains, or other income push the conversion into a higher bracket. Partial conversions over several years can sometimes control that bracket effect better than one large conversion.

Assumptions and limitations

This calculator is a planning model, not tax advice. It does not model every tax interaction, including Medicare IRMAA thresholds, ACA premium credits, Social Security taxation, state-specific retirement income rules, the pro-rata rule for mixed pre-tax and after-tax IRA balances, inherited IRA rules, Roth five-year clocks, or penalties on non-qualified withdrawals.

Use the output as a scenario comparison. Before converting, check your projected taxable income for the calendar year, confirm how taxes will be paid, and review the plan with a qualified tax professional who can see your full return.

Formula: how the estimate is built

The result can be read as result = f(a, b, c), where those inputs represent Conversion Amount ($), Current Age, Retirement Age. Keep money, time, distance, percentage, and count fields in the units requested by the form.