A conversion is a tax trade: pay now if today’s bracket is cheaper than tomorrow’s.
A Roth conversion moves money out of a pre-tax traditional IRA or 401(k) and into a Roth account. You owe ordinary income tax on the converted amount this year; in exchange that money then grows and is withdrawn completely tax-free and is never subject to lifetime RMDs. This calculator is for retirees and pre-retirees deciding whether to convert — especially anyone in a low-income "gap" year between leaving work and the start of Social Security and RMDs, who expects higher tax rates later, or who wants to leave tax-free money to heirs.
Educational, not tax advice. A conversion is permanent and interacts with your bracket, Medicare premiums, and ACA subsidies. Model it here, then confirm with a CPA or CFP before converting.
The entire decision is a bet on tax rates: pay your current rate now, or your future rate later. The calculator pays the conversion tax from outside cash (the recommended approach), grows the full converted amount tax-free in the Roth, then compares it to what the same balance would have been worth after tax if you had left it pre-tax and paid your future rate at withdrawal. A positive net advantage means converting wins; a negative one means waiting is better.
C — conversion amounttnow — current marginal tax rate (paid from outside cash)tfuture — expected tax rate at future withdrawalr — annual investment returnn — years invested before withdrawalIf the future rate equals today's rate and you pay tax from outside cash, the Roth still wins — because the dollars you used to pay the tax now grow tax-free too. The conversion only loses when your future rate drops far enough below today's.
Because the future rate (28%) is higher than today's (22%) and the tax is paid from outside cash, converting clearly wins here. Flip the future rate below the current rate and the advantage shrinks or turns negative — that is the whole bet.
| Future tax rate | Roth value | Pre-tax, after tax | Net advantage |
|---|---|---|---|
| 32% | $137,952 | $93,807 | $33,145 |
| 28% (default) | $137,952 | $99,325 | $27,626 |
| 22% | $137,952 | $107,602 | $19,349 |
| 15% | $137,952 | $117,259 | $9,693 |
| 10% | $137,952 | $124,156 | $2,795 |
| $50,000 converted, 22% now, 7% return, 15 years, tax paid from outside cash. Rerun with your numbers above. | |||
A Roth conversion moves money from a pre-tax traditional IRA or 401(k) into a Roth account. You pay ordinary income tax on the converted amount this year; in exchange the money grows and is withdrawn tax-free, and it never has lifetime RMDs.
It usually wins when your tax rate at withdrawal will be higher than today's, in low-income gap years before Social Security and RMDs start, when you can pay the tax from outside cash, and when you want to leave tax-free money to heirs. With a 22% rate now, 28% later, 7% growth over 15 years, a $50,000 conversion shows a roughly $27,626 net advantage.
If you have any pre-tax IRA money, the IRS treats every conversion as a proportional mix of pre-tax and after-tax dollars across all your traditional, SEP, and SIMPLE IRAs. You cannot convert only the after-tax basis — this is the main obstacle to a clean backdoor Roth.
Each conversion has its own 5-year clock. If you are under 59-1/2 and withdraw converted principal before 5 years pass, a 10% penalty applies to that conversion. A separate 5-year rule governs tax-free earnings. The clock starts January 1 of the conversion year.
Pay from outside (taxable) cash. Using IRA money to cover the tax shrinks the amount that grows tax-free and, if you are under 59-1/2, the withheld portion is itself a taxable, penalized distribution. This calculator assumes the tax is paid from outside cash.
No. The Tax Cuts and Jobs Act eliminated recharacterization of conversions starting in 2018. Once you convert, it is permanent for that tax year, so size conversions carefully against your bracket.
Convert only enough to fill the top of your current marginal bracket without spilling into the next one. Done across several low-income years before RMDs begin, this caps the tax rate you pay on the converted dollars. The Tax Bracket Calculator shows your remaining headroom.
A conversion raises your modified AGI, and Medicare uses MAGI from two years prior to set Part B and D IRMAA surcharges. A large conversion at 63 or later can lift premiums at 65. Many people convert before 63 or keep conversions under the IRMAA tier thresholds.
A backdoor Roth is a non-deductible traditional IRA contribution converted to Roth, used by high earners over the Roth income limit. It only works cleanly with no other pre-tax IRA balances because of the pro-rata rule. This calculator models the tax math of any conversion, including a backdoor.
Yes. Roth IRAs have no lifetime RMDs for the original owner, so converting pre-tax dollars before age 73 lowers the balance that future RMDs are calculated from and can keep later taxable income and IRMAA lower. See the RMD Calculator to quantify the RMD you would otherwise face.
This calculator is educational and is not tax or financial advice. It assumes tax is paid from outside cash and ignores state tax, IRMAA, ACA subsidy, and NIIT interactions. Confirm your figures with IRS Pub. 590-A or a qualified tax professional before converting.