Roth Conversion Calculator

Analyze the tax impact of converting your Traditional IRA or 401(k) to a Roth IRA. See break-even year, future value comparison, and Medicare IRMAA warnings for 2026.

Account Information
Enter the total balance in your Traditional retirement account.
Amount you want to convert from Traditional to Roth.
Personal Information
Ages 63+ will see Medicare IRMAA warnings if applicable.
When you plan to start retirement withdrawals.
Determines your federal tax bracket thresholds.
Income Details
Taxable income before the Roth conversion.
Expected taxable income from all sources in retirement.
Tax & Growth Assumptions
Enter 0 for no-income-tax states (FL, TX, etc.)
Historical stock market average is around 7-10%.
How far into the future to compare Roth vs Traditional values.
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Enter your account and income details above and click Calculate Roth Conversion to see your tax impact and break-even analysis.

Understanding Roth Conversions

A Roth conversion moves money from a Traditional IRA or 401(k) to a Roth IRA. While you pay taxes on the conversion now, qualified withdrawals from Roth accounts are completely tax-free in retirement.

What is a Roth Conversion?

When you convert Traditional retirement funds to Roth:

  • Immediate Tax Impact: The converted amount is added to your taxable income for the year
  • Tax-Free Growth: After conversion, all future growth is tax-free
  • No RMDs: Roth IRAs have no required minimum distributions during your lifetime
  • Tax-Free Withdrawals: Qualified withdrawals in retirement are completely tax-free

When Does a Roth Conversion Make Sense?

A Roth conversion is often beneficial when:

  • You expect your tax rate in retirement to be higher than now
  • You're in a temporarily low income year (job transition, sabbatical)
  • You want to reduce future RMD obligations
  • You want to leave tax-free inheritance to beneficiaries
  • You have cash outside retirement accounts to pay the tax

Understanding the Break-Even Point

The break-even point is when the Roth's tax-free growth overcomes the upfront tax cost. Key factors include:

  • Current vs. future tax rate differential
  • Investment return rate
  • Time horizon until withdrawal
  • Whether you pay tax from outside funds or from the conversion

IRMAA and Medicare Considerations

Medicare uses your income from 2 years ago to set premium surcharges (IRMAA). A large Roth conversion at ages 63-64 could increase your Medicare premiums in your first years of eligibility. Our calculator warns about potential IRMAA impacts.

Multi-Year Conversion Strategies

Instead of converting all at once, consider spreading conversions across multiple years to:

  • Stay within your current tax bracket
  • Avoid IRMAA tier increases
  • Manage state tax impact
  • Preserve flexibility for future planning

401(k) Calculator

Project your 401(k) balance at retirement with employer match and investment growth.

Retirement Savings Calculator

Determine how much you need to save for a secure retirement.

Compound Interest Calculator

See how your investments grow over time with compound interest.

Frequently Asked Questions

What is a Roth conversion?

A Roth conversion is when you move money from a Traditional IRA or 401(k) to a Roth IRA. You pay income taxes on the converted amount now, but qualified withdrawals in retirement are tax-free.

Do I pay taxes on a Roth conversion?

Yes, the converted amount is added to your taxable income for the year. You pay federal and state income taxes on the conversion. The tax is calculated at your marginal rate, which may push you into a higher bracket.

How long until a Roth conversion pays off?

The break-even point depends on your current vs. future tax rates and investment returns. If your tax rate in retirement is expected to be higher than now, a Roth conversion may be immediately beneficial. Use our calculator to see your specific break-even year.

What is the 5-year rule for Roth conversions?

Each Roth conversion has its own 5-year clock. If you withdraw converted funds before 5 years AND before age 59.5, you may owe a 10% early withdrawal penalty on the converted amount (the tax portion was already paid).

Can I undo a Roth conversion?

No, as of 2018, Roth conversions can no longer be undone (recharacterized). Before converting, carefully consider the tax implications since the decision is permanent.

How does a Roth conversion affect Medicare premiums?

A large Roth conversion increases your MAGI, which can trigger Medicare IRMAA surcharges 2 years later. For example, a 2024 conversion affects 2026 Medicare premiums. Our calculator shows IRMAA warnings for those age 63 and older.

Should I convert my entire 401(k) to Roth?

Converting all at once could push you into a much higher tax bracket. Consider spreading conversions over multiple years to stay in lower brackets. Our calculator shows the optimal conversion amount to stay in your current bracket.

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