Roth IRA Conversion Calculator 2026 – Should You Convert Your Traditional IRA?
Calculate the tax cost and long-term benefits of converting a Traditional IRA to Roth. Compare scenarios, optimize timing, and decide if conversion makes sense for you.
Roth IRA Conversion Calculator 2026 – Should You Convert Your Traditional IRA?
Introduction
You've got $200,000 sitting in a Traditional IRA. Every dollar you withdraw in retirement gets taxed as ordinary income. At a 24% tax rate, that's $48,000 going to the IRS.
But there's another option: convert it to a Roth IRA now, pay the tax bill upfront, and never pay taxes on it again. Not on the growth. Not on the withdrawals. Never.
Sounds great, right? Except you'll owe the IRS a massive tax bill this year. For a $200,000 conversion, that could be $40,000-$50,000 depending on your bracket.
So the question is: should you do it?
The Roth IRA Conversion Calculator helps you figure out if paying taxes now saves you money in the long run. It factors in your current tax rate, expected future rate, investment growth, and time until retirement.
What Is a Roth IRA Conversion?
A Roth conversion is when you move money from a Traditional IRA (or 401k) to a Roth IRA. You pay income tax on the converted amount in the year you do it. After that, the money grows tax-free forever.
Here's what happens:
- You have $100,000 in a Traditional IRA
- You convert it to a Roth IRA
- The IRS treats that $100,000 as taxable income
- You pay tax based on your bracket (let's say 24% = $24,000)
- Now it's in a Roth, growing tax-free
- When you retire, you withdraw it tax-free
The bet you're making: paying 24% tax now is better than paying whatever your rate will be in retirement.
Why Convert to a Roth?
Tax-Free Growth Forever
Once money is in a Roth, it never gets taxed again. That $100,000 could grow to $500,000 over 30 years. In a Traditional IRA, you'd owe taxes on all $500,000. In a Roth? Zero taxes.
No Required Minimum Distributions (RMDs)
Traditional IRAs force you to start withdrawing at age 73 (as of 2026). Roth IRAs have no RMDs during your lifetime. You can let it grow as long as you want.
This is huge for estate planning. You can pass a Roth IRA to your kids, and they inherit tax-free money.
Hedge Against Future Tax Rates
Tax rates are historically low right now. The top bracket is 37%. In the 1970s, it was 70%. If rates go up in the future, you'll be glad you paid taxes at today's rates.
Flexibility in Retirement
With a Roth, you control your taxable income in retirement. Need to withdraw $80,000 one year? No problem—it doesn't increase your tax bill or affect Medicare premiums.
The Math: When Does Conversion Make Sense?
The break-even analysis comes down to this: will you pay less tax now or later?
Formula:
Tax Now = Conversion Amount × Current Tax Rate
Tax Later = (Conversion Amount × Growth Factor) × Future Tax Rate
If Tax Now < Tax Later, convert. If not, don't.
Example 1: Conversion Makes Sense
- Current age: 45
- Conversion amount: $100,000
- Current tax rate: 22%
- Expected future rate: 24%
- Years until retirement: 20
- Expected return: 7%
Tax if you convert now: $100,000 × 22% = $22,000
If you don't convert:
- $100,000 grows to $387,000 in 20 years
- Tax at withdrawal: $387,000 × 24% = $92,880
Savings from converting: $70,880
Example 2: Conversion Doesn't Make Sense
- Current age: 55
- Conversion amount: $100,000
- Current tax rate: 32%
- Expected future rate: 22% (lower income in retirement)
- Years until retirement: 10
- Expected return: 7%
Tax if you convert now: $100,000 × 32% = $32,000
If you don't convert:
- $100,000 grows to $197,000 in 10 years
- Tax at withdrawal: $197,000 × 22% = $43,340
Cost of converting: You pay $32,000 now vs $43,340 later
Wait—that looks like converting saves money. But remember, you have to pay that $32,000 from somewhere. If you pull it from the IRA, you're converting less. If you pay from savings, that's $32,000 that could have been invested.
The real question: will your tax rate be higher or lower in retirement?
Current Tax Brackets (2026)
| Filing Status | Income Range | Tax Rate |
|---|---|---|
| Single | $0 - $11,600 | 10% |
| Single | $11,600 - $47,150 | 12% |
| Single | $47,150 - $100,525 | 22% |
| Single | $100,525 - $191,950 | 24% |
| Single | $191,950 - $243,725 | 32% |
| Single | $243,725 - $609,350 | 35% |
| Single | $609,350+ | 37% |
Married Filing Jointly brackets are roughly double the single amounts.
The key insight: if you're in the 22% or 24% bracket now and expect to be in the 32%+ bracket in retirement (maybe from RMDs, Social Security, pensions), conversion could save you a fortune.
Conversion Strategies
Strategy 1: Convert in Low-Income Years
Did you lose your job? Take a sabbatical? Have a business loss? These are golden opportunities to convert at a lower tax rate.
If your income drops from $150,000 to $50,000 for one year, you could convert $50,000 and stay in the 12% bracket instead of your usual 24%.
Strategy 2: Partial Conversions Over Multiple Years
Don't convert everything at once. Spread it over 3-5 years to avoid jumping into higher brackets.
Example: You have $300,000 to convert. Instead of converting it all in one year (pushing you into the 35% bracket), convert $60,000/year for 5 years and stay in the 24% bracket.
Strategy 3: Convert Early in Retirement (Before RMDs)
You retire at 62. You don't need IRA money yet because you have other savings. This is the perfect time to convert. You're in a lower bracket (no salary), and you have 11 years before RMDs kick in at 73.
Strategy 4: Backdoor Roth (High Earners)
If you earn too much to contribute directly to a Roth IRA ($161,000+ single, $240,000+ married in 2026), use the backdoor:
- Contribute $7,000 to a Traditional IRA (non-deductible)
- Immediately convert it to a Roth
- Pay little to no tax (since it was non-deductible)
- Repeat every year
This is legal and explicitly allowed by the IRS.
Strategy 5: Roth Conversion Ladder (Early Retirement)
Planning to retire before 59½? You can access converted Roth money penalty-free after 5 years.
Example: You're 50 and retiring. Convert $50,000/year from your Traditional IRA. At age 55, you can withdraw that first $50,000 penalty-free (but you paid tax on it at conversion).
How to Use the Calculator
The calculator needs these inputs:
Current Situation:
- Traditional IRA balance
- Your age
- Current tax bracket
- State tax rate (if applicable)
Conversion Plan:
- Amount to convert (full or partial)
- Number of years to spread conversion
- Where tax payment comes from (IRA or outside funds)
Future Assumptions:
- Expected investment return (6-8% is reasonable)
- Expected tax bracket in retirement
- Years until retirement
The calculator shows:
- Total tax owed on conversion
- Future value in Roth vs Traditional
- Break-even age (when conversion pays off)
- Net benefit over your lifetime
Real-World Scenarios
Scenario 1: Young Professional
Profile: 35 years old, $50,000 in Traditional IRA, earning $90,000/year
Current bracket: 22% Expected retirement bracket: 24% (higher income, RMDs, Social Security)
Conversion decision: Convert now. Pay $11,000 in tax today.
Result: That $50,000 grows to $380,000 by age 65 (7% return). Tax-free withdrawals save $91,000 in taxes vs keeping it Traditional.
Scenario 2: Mid-Career High Earner
Profile: 50 years old, $500,000 in Traditional IRA, earning $250,000/year
Current bracket: 35% Expected retirement bracket: 24% (lower income, no salary)
Conversion decision: Don't convert now. Wait until retirement when you're in a lower bracket.
Result: Converting now costs $175,000 in taxes. Waiting and withdrawing in retirement costs $120,000-$150,000. Save $25,000-$55,000 by waiting.
Scenario 3: Recent Retiree
Profile: 63 years old, $400,000 in Traditional IRA, retired, living on savings
Current bracket: 12% (no income) Expected bracket at 73: 24% (RMDs kick in)
Conversion decision: Convert $40,000/year for 10 years. Stay in 12% bracket.
Result: Pay $48,000 in taxes over 10 years instead of $96,000+ from RMDs later. Save $48,000+.
Tax Traps to Avoid
The Pro-Rata Rule
If you have both deductible and non-deductible Traditional IRA contributions, you can't just convert the non-deductible part. The IRS makes you convert proportionally.
Example: You have $95,000 deductible and $5,000 non-deductible in your Traditional IRA. You want to convert $5,000. The IRS says 95% of that conversion ($4,750) is taxable, not $0.
This kills the backdoor Roth strategy if you have existing Traditional IRA balances.
Solution: Roll your Traditional IRA into your 401k (if your plan allows), leaving only non-deductible contributions. Then convert those tax-free.
Bracket Creep
Converting $100,000 doesn't mean you pay your current bracket rate on all of it. It could push you into higher brackets.
Example: You earn $80,000 (22% bracket). You convert $100,000. Now your income is $180,000, pushing $79,475 into the 24% bracket and $525 into the 32% bracket.
Solution: Use the calculator to see exactly how much you can convert while staying in your current bracket.
Medicare Premium Increases (IRMAA)
If your income exceeds certain thresholds, your Medicare Part B and D premiums increase. A large Roth conversion could trigger this.
2026 IRMAA thresholds (single):
- Under $106,000: Standard premium
- $106,000-$133,000: +$70/month
- $133,000-$167,000: +$175/month
- And so on...
A $100,000 conversion could cost you an extra $840-$2,100/year in Medicare premiums for two years (IRMAA looks at income from 2 years prior).
State Taxes
Some states don't tax retirement income. If you live in California (13.3% top rate) and plan to retire in Florida (0% income tax), don't convert now. Wait until you move.
States with no income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming.
Paying the Tax Bill
You have three options:
Option 1: Pay from the IRA
Convert $100,000, withhold $24,000 for taxes, net $76,000 in your Roth.
Downside: You're only really converting $76,000. And if you're under 59½, that $24,000 withholding counts as an early withdrawal (10% penalty + tax).
Option 2: Pay from Outside Funds
Convert $100,000, pay the $24,000 tax from your savings or checking account.
Upside: The full $100,000 goes into your Roth and grows tax-free.
Downside: You need $24,000 in cash available.
This is almost always the better option if you can afford it.
Option 3: Partial Conversion
Only convert what you can afford to pay tax on from outside funds.
Example: You have $10,000 available for taxes. Convert $41,667 (at 24% bracket = $10,000 tax). Do this every year.
When NOT to Convert
You'll Be in a Lower Bracket in Retirement
If you're currently in the 32% bracket earning $200,000 but expect to live on $60,000 in retirement (12% bracket), don't convert. You'd pay 32% now to avoid 12% later. That's backwards.
You Need the Money Soon
Roth conversions have a 5-year rule. If you convert at age 58 and need the money at 60, you'll pay a 10% penalty on the earnings (even though you're over 59½).
You Can't Afford the Tax Bill
If paying the conversion tax would drain your emergency fund or force you into debt, don't do it. The math might work, but the risk isn't worth it.
You're in Your 70s or 80s
The break-even point for most conversions is 10-15 years. If you're 75, you might not live long enough to benefit. Your heirs will, but that's a different calculation.
You Live in a High-Tax State Now, Low-Tax State Later
Wait until you move. Why pay California's 13.3% state tax on a conversion if you're retiring to Texas next year?
FAQ
Can I undo a Roth conversion?
Not anymore. The Tax Cuts and Jobs Act of 2017 eliminated "recharacterization" of conversions. Once you convert, it's permanent.
Before 2018, you could convert, watch the market crash, and undo it. Now you're stuck. So be careful about converting right before a market downturn.
Do I have to convert my entire IRA?
No. You can convert any amount you want. Most people do partial conversions over multiple years to manage the tax hit.
Can I convert a 401k to a Roth IRA?
Yes, but usually only after you leave that employer. While you're still working there, most plans don't allow in-service conversions.
Once you leave, you can roll your 401k to a Traditional IRA, then convert to Roth. Or some plans allow direct rollover to Roth (you'll owe taxes either way).
What if I convert and then the market crashes?
You're stuck. You paid tax on $100,000, it drops to $60,000, and you can't undo it. This is why some people wait for market dips to convert—you're buying low and paying tax on a lower amount.
Does a Roth conversion affect my Social Security taxes?
Yes. The conversion counts as income, which could make more of your Social Security taxable. Up to 85% of Social Security can be taxed if your income is high enough.
This is temporary (just the year of conversion), but it's another cost to factor in.
Can I convert if I'm still working?
Yes. There's no rule against it. But it might not make sense if you're in a high bracket from your salary. Wait until retirement when your income drops.
What about the 5-year rule?
There are actually two 5-year rules:
-
Contribution rule: You can withdraw Roth contributions anytime, tax and penalty-free.
-
Conversion rule: Each conversion has its own 5-year clock. If you're under 59½ and withdraw converted money before 5 years, you pay a 10% penalty (but no tax, since you already paid that).
After 59½, the 5-year rule doesn't matter for conversions.
Conclusion
Roth conversions are powerful, but they're not for everyone. The decision comes down to one question: will you pay less tax now or later?
If you're young, in a low bracket, or expect higher taxes in the future, convert. If you're in a high bracket now and expect lower income in retirement, wait.
Use the calculator to run your specific numbers. Factor in state taxes, Medicare premiums, and where the tax payment comes from. The right answer depends on your situation.
And remember: you don't have to convert everything at once. Partial conversions over several years often make the most sense.
Action steps:
- Calculate your current and expected future tax brackets
- Estimate your Traditional IRA balance at retirement
- Use this calculator to compare scenarios
- Consider partial conversions to stay in your current bracket
- Talk to a tax professional before converting large amounts
The tax code is complicated. A $50,000 mistake is expensive. Get it right.