Roth Conversion Calculator
Analyze the tax impact, break-even timeline, and long-term benefit of converting traditional IRA or 401(k) funds to a Roth IRA.
About this calculator
This calculator compares two paths for the same dollar amount: leaving it in a traditional IRA, taxed at withdrawal, versus converting it to a Roth IRA now, taxed on the conversion but growing tax-free afterward. Federal Tax on Conversion is computed by adding the Conversion Amount on top of Current Taxable Income and taking the difference in federal tax before and after -- so it reflects your real marginal impact, not a flat rate. Conversion Amount is the primary driver of Tax Cost of Conversion, running roughly neck-and-neck with Filing Status, which selects an entirely different bracket table for that same calculation.
Net Benefit (Tax Paid Outside) -- the advantage of paying the conversion tax from money outside the retirement account -- is mathematically Conversion Amount times the investment growth factor times Expected Retirement Tax Rate, which means Conversion Amount and Expected Retirement Tax Rate move this output by an identical proportional share: doubling either one doubles the net benefit in this formula. Expected Annual Return and Years Until Withdrawal both feed the same compounding growth factor, so extending the time horizon or raising the expected return both raise every dollar-value output, though their exact relative weight shifts with the specific numbers you enter rather than one reliably outranking the other. This calculator assumes the entire converted amount grows at one fixed annual return with no volatility, and it doesn't model Roth conversion's five-year holding period rule, required minimum distributions, or the effect a large conversion has on Medicare IRMAA premiums or other income-tested thresholds.
Tax Disclaimer
This calculator provides estimates based on general tax rules and may not reflect your specific situation. Tax laws vary by jurisdiction and change frequently. Consult a qualified tax professional or CPA for advice tailored to your circumstances.
Inputs
Results
Net Benefit (Tax Paid Outside)
$42,567.00
≈ 4 years of state college
Tax Cost of Conversion
$13,986.00
≈ 7 gaming PCs
How to Use This Calculator
- Enter Conversion Amount — the amount to move from a traditional IRA/401(k) to a Roth IRA.
- Set Current Taxable Income — the conversion adds to ordinary income in the conversion year.
- Select Filing Status and enter State Tax Rate %.
- Set Expected Annual Return % and Years Until Withdrawal.
- Enter Expected Retirement Tax Rate % — if higher than current rate, Roth conversion saves money.
- Review Net Benefit (Tax Paid Outside) — paying conversion tax from non-retirement funds maximizes the Roth's advantage.
How the result changes with Years Until Withdrawal
| Years Until Withdrawal | Net Benefit (Tax Paid Outside) | Tax Cost of Conversion |
|---|---|---|
| 10 | $21,639.00 | $13,986.00 |
| 15 | $30,349.00 | $13,986.00 |
| 30 | $83,735.00 | $13,986.00 |
| 50 | $324,027.00 | $13,986.00 |
What each input means
- Conversion Amount ($)
- Amount to convert from traditional IRA/401(k) to Roth IRA.
- Current Taxable Income ($)
- Your taxable income before the conversion. The conversion amount is added on top. Tax computed using current-year federal brackets.
- Filing Status
- Your filing status determines which tax brackets apply to the conversion income.
- State Tax Rate (%)
- Your state income tax rate applied to the conversion amount.
- Expected Annual Return (%)
- Expected annual investment return on the converted funds.
- Years Until Withdrawal
- How many years until you withdraw the funds (must be 59.5+ to avoid penalties).
- Expected Retirement Tax Rate (%)
- Your projected marginal tax rate when you withdraw from a traditional IRA in retirement.
What each result means
- Net Benefit (Tax Paid Outside)
- Roth advantage if you pay the conversion tax from non-retirement funds.
- Net Benefit (Tax From IRA)
- Roth advantage if the tax is paid from the converted funds themselves.
- Tax Cost of Conversion
- Total federal + state tax owed on the conversion in the current year.
- Effective Tax Rate on Conversion
- Total tax on the conversion divided by the conversion amount.
- Roth Future Value (Tax-Free)
- Projected value of the Roth at withdrawal — all tax-free.
- Traditional After-Tax Value
- Projected after-tax value if funds stay in traditional IRA.
- Federal Tax on Conversion
- Federal income tax from adding the conversion to your current income.
- Break-Even (Years)
- Years until Roth overtakes traditional. 0 = immediately beneficial, -1 = may never break even.
How this is calculated
Worked example, using the default values
- Identify Input Parameters4 parametersConversion Amount ($) = 50000, Current Taxable Income ($) = 80000, Filing Status = 0, State Tax Rate (%) = 5 = 7 input(s) provided
- Calculate Net BenefitNet Benefit = rothAfterTaxBest - traditionalAfterTax42567 = $42,567
- Calculate Tax Cost of ConversionTax Cost of Conversion = federalTaxOnConversion + stateTaxOnConversion13986 = $13,986
- Calculate Net BenefitNet Benefit = rothFromConversion - traditionalAfterTax-11555 = $-11,555
- Calculate Effective Tax Rate on ConversionEffective Tax Rate on Conversion = conversionAmount > 027.97 = 27.97%
Engine last updated . Checked against 2 independently-derived tests — how we verify calculators. Built by Paul Gunder, a software engineer, not a licensed financial, medical, or legal professional.
Frequently Asked Questions
Why do Conversion Amount and Expected Retirement Tax Rate move Net Benefit by the same proportion?
Net Benefit (Tax Paid Outside) is mathematically Conversion Amount multiplied by the investment growth factor multiplied by Expected Retirement Tax Rate divided by 100 -- a straightforward three-way product. Since Conversion Amount and Expected Retirement Tax Rate both appear as simple multipliers with no other role in the formula, a given percentage increase in either one produces the same percentage increase in Net Benefit.
Why is Federal Tax on Conversion not just Conversion Amount times my tax rate?
Federal Tax on Conversion is the DIFFERENCE between federal tax computed at Current Taxable Income plus the conversion, and federal tax computed at Current Taxable Income alone -- so it captures the real marginal effect, including any bracket you cross by adding the conversion on top. A flat-rate estimate would miss this if the conversion pushes part of your income into a higher bracket.
Does a longer time horizon always help the Roth conversion more?
Both Expected Annual Return and Years Until Withdrawal feed the same compounding growth factor that multiplies every dollar-value output (Roth Future Value, Traditional After-Tax Value, and both Net Benefit figures) -- a longer horizon generally means more total compounding for the converted funds to work with, but exactly how much it helps relative to the return rate depends on your specific inputs rather than a fixed rule.
What does this calculator not account for?
It assumes one constant annual return with no market volatility, and doesn't model the Roth five-year holding period rule for penalty-free withdrawals, required minimum distributions (which Roth IRAs are exempt from during the original owner's lifetime, unlike traditional IRAs), or how a large conversion in one year can temporarily raise Medicare IRMAA premiums or affect other income-tested benefits.
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