Roth IRA Conversion Calculator
See if converting your Traditional IRA to a Roth IRA makes financial sense — and when you'll break even on the tax bill.
| Age | Year | Roth Balance | Trad (After-Tax) | Roth Advantage |
|---|
How to Use This Roth IRA Conversion Calculator
Enter your Traditional IRA balance you want to convert, your current and expected retirement tax rates, your age, and the annual return you expect on your investments. Choose whether you'll pay the conversion tax from outside savings or from the IRA itself, then click Calculate Roth Conversion. The tool instantly shows your break-even year, Roth advantage at retirement, and a full year-by-year projection table.
Why This Matters
The Roth conversion decision is one of the most impactful moves in retirement planning — and one of the most misunderstood. When you convert a Traditional IRA to a Roth, you pay income tax now in exchange for completely tax-free growth and withdrawals forever. That trade-off isn't always worth it, but in the right circumstances, it can save you tens of thousands of dollars.
Consider someone aged 45 converting $150,000 at a 22% rate, planning to retire at 65 with a 7% return. They pay roughly $33,000 in taxes today. But because Roth earnings grow tax-free for 20 years, and because they avoid Required Minimum Distributions (RMDs), the Roth account can end up $60,000–$100,000 larger in after-tax terms than the traditional account. The conversion typically breaks even somewhere around year 8–12.
Roth conversions are especially powerful if you expect tax rates to rise (historically likely), if you have a long time horizon, if you're in a temporarily lower-income year (job change, early retirement, etc.), or if you want to leave tax-free assets to heirs. They're less compelling if you expect lower income in retirement than now, or if you'd have to sell the IRA itself to pay the tax bill.
How It's Calculated
The calculator compares two scenarios — keeping the Traditional IRA vs. converting to Roth — side by side over your investment horizon.
Roth Balance (if outside funds pay tax) = Balance × (1 + r)^years
Roth Balance (if IRA pays tax) = Balance × (1 − tax rate) × (1 + r)^years
Trad IRA After-Tax = Balance × (1 + r)^years × (1 − retirement tax rate)
Roth Advantage = Roth Balance − Trad After-Tax Balance
The break-even year is the first year at which the Roth balance (net of the compounded opportunity cost of the tax payment) exceeds the traditional after-tax balance. If you pay taxes from outside savings, the Roth advantage compounds faster because 100% of the converted funds keeps growing.
Tips & Common Mistakes
- Pay the tax from outside savings if at all possible. Converting $100,000 and paying the $22,000 tax from savings means the full $100,000 grows tax-free. Paying from the IRA leaves only $78,000 growing — significantly worse.
- Don't ignore state income taxes. Add your state rate to the federal rate for a true picture. Some states like California add 9–13%, dramatically changing the math.
- Consider partial conversions over multiple years. A single large conversion can push you into a higher bracket. Converting $30,000–$50,000/year during low-income years often beats one big conversion.
- Watch the Medicare IRMAA surcharges. High income from a Roth conversion can trigger Medicare premium surcharges 2 years later — a hidden cost many retirees miss.
- The 5-year rule matters. Each Roth conversion starts its own 5-year clock for penalty-free withdrawal of that converted amount. Plan accordingly if you're under 59½.