Personal and Household

Roth conversion calculator

Whether paying tax now beats paying it later, and the future tax rate at which the answer flips.

Advantage of converting·
Tax due on the conversion now
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Roth value when you draw on it
·
If you did not convert, after tax
·
Plus the tax money, still invested
·
Not converting, all in
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Breakeven future tax rate
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How it works

What this is actually calculating.

A conversion moves money from a traditional IRA to a Roth and you pay income tax on it now instead of later. The whole decision reduces to one comparison: the rate you pay today against the rate you would have paid on withdrawal. Everything else is arithmetic around that.

Where the tax comes from is the input people leave out, and it changes the answer more than anything else. Paying it from other savings puts the full amount to work tax-free, so converting wins even when the two rates are identical. Paying it out of the conversion means only what is left after tax makes it across, and then converting is a wash unless your future rate is higher.

What moves the number

The parts that decide the answer.

No state tax is modelled here

A conversion is taxed by your state as well, in the year you do it, and the state you retire to may tax withdrawals differently or not at all. Moving from Pennsylvania, which does not tax retirement distributions, to a state that does, or the reverse, can matter more than the federal rate this compares.

The breakeven rate is the real output

Not the dollar figure, which depends on a return nobody knows. The breakeven is the future tax rate at which converting stops paying, and you can judge whether your own rate is likely to land above or below it.

A conversion can raise your Medicare premiums

Converted amounts count toward the income that sets IRMAA surcharges two years later. A conversion sized without checking that can cost more in premiums than it saves in tax.

Filling a low bracket beats converting it all

Most of the value comes from converting just enough to use up a low bracket in a year when income is down, often between retiring and starting Social Security or required distributions.

Each conversion has its own five-year clock

Converted amounts generally have to season five years before they can be withdrawn without penalty if you are under 59 and a half. That matters if the money is needed soon.

Questions

Before you rely on it.

Can a conversion be undone?

No. Recharacterising a conversion was removed in 2018, so the decision is final once made. That is the argument for converting in measured amounts rather than all at once.

What future tax rate should I use?

Your expected marginal rate in the years you would actually withdraw, not your rate today. Required distributions, a surviving spouse filing single, and Social Security becoming taxable all push it up more often than people expect.

Does this account for state tax?

No, and Pennsylvania treats retirement income differently from most states. Fold your state rate into the two rate fields, or ask your CPA before acting on the result.

Before you rely on it

About this calculator.

An illustration, not advice

This is an educational illustration, not investment, tax, or legal advice, and not a recommendation or projection of any particular result. It uses only the assumptions you enter.

Real returns are not this smooth

Where a return is involved it is treated as constant, which no real portfolio is. Actual results will differ, and a sequence of poor early returns can change an outcome substantially even when the average holds.

Nothing you type leaves your browser

Every calculation runs on your own machine. Nothing you enter is transmitted or stored, and none of it reaches me unless you ask for a PDF and give me your details.

Talk to your CPA and attorney before relying on any of it.See all twelve calculators