Roth IRA Conversion Calculator
Estimates the net long-term benefit of moving traditional IRA funds into a Roth IRA after accounting for taxes paid now versus taxes avoided later. Use it when evaluating whether a conversion makes sense in a low-income year.
Last updated: September 2026
Formula below · 2 sources (IRS, Wikipedia) · Updated Sep 2026
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About this calculator
Converting moves pre-tax money into a Roth IRA: you pay income tax on it at today's rate, and it then grows and comes out tax-free. The fair comparison is the same pre-tax dollars under each choice. Keep: the amount C grows to C × (1 + r)^n and is taxed at your retirement rate, leaving C × (1 + r)^n × (1 − retirement rate). Convert: the tax C × current rate is paid now; if it comes out of the converted money, the Roth holds C × (1 − current rate) and grows tax-free to C × (1 − current rate) × (1 + r)^n. The difference is: Net benefit = C × (1 + r)^n × (retirement rate − current rate). The same result holds if you pay the tax from other savings that would otherwise grow at the same rate. So a conversion helps only when your retirement tax rate will be higher than your current rate; with equal rates it is break-even no matter how long the money grows, and with a lower retirement rate it costs you. Paying the tax from a taxable account adds a modest extra advantage not counted here, because it effectively moves more money into tax-free growth. Not modeled: state tax, a large conversion pushing you into a higher bracket, Medicare IRMAA, smaller future RMDs, and the five-year rule for withdrawing converted amounts.
How to use
Suppose you convert $20,000, your current tax bracket is 22%, your retirement tax bracket is 24%, and you have 20 years until retirement with a 7% expected return. Gross future value: $20,000 × (1.07)^20 = $77,394. Keep: $77,394 × (1 − 0.24) = $58,819 after tax. Convert: $20,000 × 0.78 = $15,600 in the Roth grows to $60,367, tax-free. Net benefit = $60,367 − $58,819 = $1,548, which is $77,394 × (24% − 22%). The positive value means the conversion adds a little long-term value in this scenario; at equal brackets it would be $0.
Frequently asked questions
When does converting a traditional IRA to a Roth IRA make financial sense?
A Roth conversion is most beneficial when your current marginal tax rate is equal to or lower than the rate you expect to pay in retirement. This often occurs during a career gap, early retirement before Social Security begins, or years with unusually large deductions. It also makes sense if you want to leave tax-free assets to heirs, since Roth IRAs have no required minimum distributions during the owner's lifetime. Running the numbers with a Roth conversion calculator for your specific bracket situation is the best first step.
How does a Roth IRA conversion affect my taxes in the year I convert?
The converted amount is added to your ordinary taxable income in the year of conversion, which can push you into a higher marginal bracket if not managed carefully. You will owe federal (and possibly state) income tax on the full converted amount. It can also trigger phaseouts for other deductions or credits, such as the premium tax credit for ACA health insurance. Many advisors recommend spreading a large conversion across multiple tax years to stay within a target bracket rather than converting a lump sum at once.
What is the difference between a Roth IRA and a traditional IRA for retirement withdrawals?
Traditional IRA contributions are typically tax-deductible, and withdrawals in retirement are taxed as ordinary income. Roth IRA contributions are made with after-tax dollars, but qualified withdrawals — including all growth — are completely tax-free. Traditional IRAs require minimum distributions starting at age 73 under current law, whereas Roth IRAs have no such requirement during the owner's lifetime. This makes Roth accounts particularly powerful for people who do not need the money immediately in retirement and want to pass wealth to beneficiaries efficiently.