Roth Conversion Calculator
Should you convert your Traditional IRA to Roth? This calculator analyzes the tax impact, compares scenarios, and helps you find the optimal conversion amount based on your tax brackets.
Your Situation
Conversion Analysis
Estimated benefit: $3,712
Scenario Comparison at Withdrawal
| Scenario | Pre-Tax Value | After-Tax Value |
|---|---|---|
| No Conversion (Keep Traditional) | $1,579,408 | $1,231,938 |
| Convert $50,000 Now | $1,548,372 | $1,235,650 |
Tax Bracket Space Available
Room to convert before hitting higher brackets:
Conversion Amount Comparison
| Convert | Tax Cost | Effective Rate | Marginal Rate | Net to Roth |
|---|---|---|---|---|
| $25,000 | $4,325 | 17.3% | 22% | $20,675 |
| $50,000 | $9,825 | 19.7% | 22% | $40,175 |
| $75,000 | $15,523 | 20.7% | 24% | $59,478 |
| $100,000 | $21,523 | 21.5% | 24% | $78,478 |
| $150,000 | $33,523 | 22.3% | 24% | $116,478 |
RMD Impact (If No Conversion)
At age 73, your estimated Traditional balance will be $1,689,966.
First RMD: ~$63,772/year, creating ~$14,030 in taxes.
Converting now reduces future RMDs and their tax impact.
Roth Conversion Strategy
When Conversion Makes Sense
Convert when your current tax rate is lower than expected retirement rate, you have years for tax-free growth, or you want to reduce future RMDs. Best years: low income years, early retirement, before Social Security.
Fill the Bracket
Convert just enough to "fill" your current tax bracket without pushing into a higher one. This maximizes the amount converted at lower rates. Repeat annually for a multi-year conversion strategy.
Pay Tax from Outside
If possible, pay the conversion tax from non-retirement funds. This maximizes the amount that goes into your Roth and grows tax-free. Using IRA funds to pay tax reduces the benefit.
Frequently Asked Questions
What is a Roth conversion?
A Roth conversion moves money from a Traditional IRA or 401(k) to a Roth IRA. You pay income tax on the converted amount now, but:
- Future growth is tax-free
- Qualified withdrawals are tax-free
- No Required Minimum Distributions (RMDs)
- Tax-free inheritance for beneficiaries
When does a Roth conversion make sense?
Consider converting when:
- Your current tax rate is lower than expected retirement rate
- You're in a low-income year (job loss, early retirement, sabbatical)
- You want to reduce future RMDs
- You have 10+ years for tax-free growth
- You want to leave tax-free money to heirs
- You expect tax rates to increase in the future
How much should I convert?
A common strategy is "filling the bracket"—convert just enough to reach the top of your current tax bracket without pushing into a higher one.
Example: If you're in the 22% bracket with $20,000 of room before hitting 24%, convert $20,000 this year. Repeat annually for a multi-year strategy.
Can I undo a Roth conversion?
No. As of 2018, Roth conversions cannot be undone (recharacterized). This makes careful planning essential. Consider:
- Having funds outside the IRA to pay taxes
- Converting in stages over multiple years
- Working with a tax professional for large conversions