Roth Conversion Calculator
Analyze Tax Impact & Optimize Your Conversion Strategy
A Roth IRA conversion moves money from a Traditional IRA or 401(k) to a Roth IRA, exchanging a tax bill today for tax-free growth and withdrawals in retirement. Our calculator helps you analyze the tax impact, determine the break-even point, and find the optimal conversion amount using our unique bracket-filling strategy.
Open Source & Transparent
All calculations are open source and verifiable on GitHub. We believe in transparency and welcome contributions to improve our tools.
Tax on $50,000 Conversion
May Not Be OptimalNo Break-Even
$13,500
Effective Rate
27.0%
Marginal Rate
22.0%
Net Roth Amount
$36,500
Benefit at Retirement
-$14,754
Tax Impact Breakdown
Federal Tax
$11,000
State Tax
$2,500
Amount in Current Bracket
$50,000
at 22.0%
Amount in Next Bracket
$0
Break-Even Analysis
Years to Break Even
∞
Benefit at Retirement
-$14,754
Age 65
Lifetime Savings
-$80,074
Through Age 90
Recommendation
Conversion may not be optimal this year. Your current tax rate is higher than your expected retirement rate. Consider waiting for a lower-income year or if you expect tax rates to rise.
Scenario Comparison at Retirement
No Conversion
$865,547
After-tax value
Partial Conversion
$850,793
After-tax value
Full Conversion
$656,549
Tax-free (Roth)
Optimal Conversion Strategy
Recommended Amount
$0
Tax cost: $0
Max in Current Bracket
$81,050
Before next bracket
Your current 22% bracket is higher than your expected retirement 12% bracket. Conversion may not be beneficial unless you expect tax rates to increase.
Important Considerations
- 5-year rule: Converted amounts may be subject to 10% early withdrawal penalty if withdrawn within 5 years or before age 59½.
Conversion Details
Before conversion (AGI minus deductions)
Quick Summary
- Tax Due:$13,500
- Effective Rate:27.0%
- Break-Even:N/A
- Bracket:22.0%
What is a Roth IRA Conversion?
A Roth IRA conversion is the process of transferring funds from a tax-deferred retirement account (Traditional IRA, 401(k), 403(b), SEP IRA, or SIMPLE IRA) to a Roth IRA. When you convert, you pay income taxes on the converted amount in the year of conversion, but the money then grows tax-free and qualified withdrawals are completely tax-free.
The key decision is whether it makes sense to pay taxes now at your current rate versus paying taxes later at your retirement rate. Our calculator helps you analyze this trade-off with break-even analysis and multi-year projections.
Traditional vs Roth: The Trade-Off
Traditional IRA / 401(k)
- ✓ Tax deduction when contributing
- ✓ Tax-deferred growth
- ✗ Taxed as ordinary income at withdrawal
- ✗ Required Minimum Distributions (RMDs) at 73/75
- ✗ Heirs pay tax on inherited funds
Roth IRA
- ✗ No tax deduction when contributing
- ✓ Tax-free growth
- ✓ Tax-free qualified withdrawals
- ✓ No RMDs for original owner
- ✓ Tax-free inheritance for heirs
The Bracket-Filling Strategy
The bracket-filling strategy is our recommended approach for optimizing Roth conversions. Instead of converting arbitrary amounts, you convert exactly enough to "fill up" your current tax bracket without spilling into the next higher rate.
Example: Married Filing Jointly
Current Taxable Income
$120,000
22% Bracket Ends At
$201,050
Optimal Conversion
$81,050
By converting $81,050, you pay 22% tax on the entire conversion. If you converted $90,000 instead, the extra $8,950 would be taxed at 24% – costing you an additional 2% on that portion.
2024 Federal Tax Brackets
Understanding the tax brackets is essential for conversion planning. Here are the 2024 federal income tax brackets:
| Tax Rate | Single | Married Filing Jointly |
|---|---|---|
| 10% | $0 - $11,600 | $0 - $23,200 |
| 12% | $11,600 - $47,150 | $23,200 - $94,300 |
| 22% | $47,150 - $100,525 | $94,300 - $201,050 |
| 24% | $100,525 - $191,950 | $201,050 - $383,900 |
| 32% | $191,950 - $243,725 | $383,900 - $487,450 |
| 35% | $243,725 - $609,350 | $487,450 - $731,200 |
| 37% | $609,350+ | $731,200+ |
Brackets apply to taxable income (AGI minus deductions). Standard deduction for 2024: $14,600 (single), $29,200 (married filing jointly).
Best Times to Convert
Low-Income Years
Job loss, sabbatical, early retirement, or between jobs? These are ideal times to convert at lower tax rates before Social Security and RMDs boost your income.
Market Downturns
When markets drop, you can convert more shares for the same tax cost. When the market recovers, all that growth is tax-free in your Roth.
Before RMDs Begin
Ages 59½ to 73 are often the "golden window" for conversions. You can access funds penalty-free, may have lower income, and reduce future RMD obligations.
High Deduction Years
Large charitable donations, medical expenses, or business losses can offset conversion income. Consider bunching deductions to create optimal conversion years.
Watch These Income Thresholds
Roth conversions increase your Modified Adjusted Gross Income (MAGI), which can trigger additional costs:
- ! IRMAA (Medicare Surcharges) – Income above $103,000 (single) / $206,000 (married) triggers higher Medicare Part B and D premiums for 2 years.
- ! Net Investment Income Tax (NIIT) – 3.8% additional tax on investment income for MAGI above $200,000 (single) / $250,000 (married).
- ! Social Security Taxation – Higher income means more of your Social Security benefits become taxable (up to 85%).
- ! ACA Premium Subsidy Cliff – If using healthcare.gov, conversions can reduce or eliminate premium tax credits.
Frequently Asked Questions
What is a Roth IRA conversion? ▼
A Roth IRA conversion is the process of moving money from a traditional IRA, SEP IRA, SIMPLE IRA, or employer-sponsored retirement plan (like a 401(k)) to a Roth IRA. The converted amount is added to your taxable income for the year, but once in the Roth, future growth and qualified withdrawals are tax-free.
When is a Roth conversion worth it? ▼
A Roth conversion is typically worth considering when: you expect your tax rate to be higher in retirement, you're in a temporarily low-income year, you want to reduce future RMDs, you have a long time horizon for tax-free growth, or you want to leave tax-free assets to heirs. The break-even analysis in our calculator helps determine if conversion makes sense for your specific situation.
What is the bracket-filling strategy? ▼
The bracket-filling strategy involves converting just enough traditional retirement funds to fill your current tax bracket without pushing you into the next higher bracket. For example, if you're in the 22% bracket with $50,000 of room before the 24% bracket, you might convert exactly $50,000 to maximize the conversion while keeping the entire amount taxed at 22%.
How long does it take for a Roth conversion to break even? ▼
The break-even period depends on several factors: the tax paid on conversion, your expected retirement tax rate, and investment returns. Typically, if your retirement tax rate will be lower than your current rate, break-even may take 10-15+ years. If rates are similar or higher in retirement, break-even can occur in 7-10 years or less.
Can I undo a Roth conversion? ▼
No, as of 2018, Roth conversion recharacterizations are no longer allowed. The Tax Cuts and Jobs Act eliminated the ability to undo (recharacterize) Roth conversions. This makes it even more important to carefully analyze the tax implications before converting.
Should I pay the conversion tax from the IRA or outside funds? ▼
Always pay the tax from outside funds if possible. If you pay from the converted amount, you lose that money from tax-free growth forever, plus if you're under 59½, the portion used for taxes is considered an early distribution and subject to a 10% penalty. Paying from outside funds maximizes the amount working for you tax-free.
Is there an income limit for Roth conversions? ▼
No! Unlike Roth IRA contributions (which have income limits), Roth conversions have no income limits. Anyone can convert any amount from a traditional retirement account to a Roth IRA, regardless of income. This is the basis of the "backdoor Roth" strategy for high earners.
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