Roth Conversion Calculator

A conversion is a bet on which tax rate is lower: yours today, or yours later

Converting a traditional retirement balance to Roth means paying ordinary income tax on the converted amount now, in exchange for that money growing and eventually being withdrawn entirely tax-free later. Whether that trade is favorable depends almost entirely on one comparison: is your current marginal tax rate on the conversion lower than the rate you would otherwise pay on withdrawals from the same money years from now.

This calculator runs that comparison using your actual current income and filing status, rather than a flat assumed rate, because the real tax cost of a conversion depends heavily on exactly where it lands in the bracket structure — and that detail is easy to get wrong with a rough estimate.

Why the tax cost is not simply “conversion amount times my bracket”

A conversion is added directly on top of your existing taxable income, and because federal tax brackets are progressive, the dollars from the conversion are taxed at whatever rate applies once your existing income has already filled the lower brackets — which can mean part of a large conversion spills into a higher bracket than the one your regular income alone would put you in.

This calculator computes the tax cost properly: it calculates the tax on your income with the conversion added, subtracts the tax on your income without it, and the difference is the conversion’s true marginal cost across every bracket it actually touches. A rough estimate using a single flat rate — even your correct current top bracket — will generally understate the true cost of a large conversion for exactly this reason.

The core tradeoff: your rate now versus your rate later

If your marginal rate on the conversion today is lower than the rate you would otherwise pay withdrawing that same money in retirement, converting now generally wins — you locked in the lower rate. If your current rate is higher than your expected future rate, leaving the balance traditional and paying tax later at that lower rate is usually the better call.

The genuine difficulty is that your future tax rate is a projection, not a known fact — it depends on future tax law, which nobody can predict with certainty, and on your own future income level, including the effect of required minimum distributions that could push you into a higher bracket later than you expect. Many people use a Roth conversion specifically as a hedge against future tax rate uncertainty, valuing the certainty of knowing today’s cost over the risk of an unknown future rate — a consideration this calculator’s break-even comparison makes concrete but cannot fully resolve for you.

Paying the tax bill from outside funds is what makes conversion strategy actually work

This is the single most consequential practical detail in executing a conversion well: the tax owed on the conversion should ideally be paid from a separate, taxable account — not withdrawn from the retirement account itself.

Paying from outside funds means the entire converted balance continues growing tax-free inside the Roth from day one. Withholding tax from the conversion itself, or withdrawing separately from the account to cover the bill, immediately reduces how much actually makes it into tax-free growth — and for anyone under 59½, withdrawing from a traditional account to pay the tax can also trigger an early withdrawal penalty on top of the income tax already due, compounding the cost significantly.

Multi-year conversion strategies spread the tax bill across brackets

Rather than converting an entire traditional balance in a single year — which can push a large chunk of it into higher brackets all at once — many people convert smaller amounts across several years, specifically sized to fill up the remaining room in a target tax bracket without spilling into the next one.

This calculator is built to run one conversion scenario at a time, which makes it a useful tool for testing exactly how large a conversion can be in a given year before it starts crossing into a meaningfully higher bracket — run it several times at different conversion amounts against the same base income to find that threshold for your own situation.

Required minimum distributions are the reason many convert before retirement

Traditional accounts eventually force withdrawals through required minimum distributions, which can push a retiree into a higher bracket than they would otherwise choose, particularly once Social Security and RMDs combine in the same tax year. Converting some traditional balance before RMDs begin reduces the eventual mandatory distribution amount, since Roth balances are not subject to RMDs for the original account owner.

The RMD calculator shows exactly what future mandatory withdrawals would look like from a given traditional balance, which is a useful figure to have in mind when deciding how aggressively to convert in the years before RMDs start. For the broader decision on new contributions rather than existing balances, the Roth versus traditional calculator covers that related but distinct question.