Roth Conversion Calculator
Determine if converting your Traditional 401k/IRA to a Roth IRA makes financial sense.
Roth Conversion Calculator
Converting to a Roth means paying taxes now for tax-free growth and withdrawals later.
Conversion Cost
| Amount to convert | $0 |
| Tax on conversion () | $0 |
| Amount going to Roth (after tax) | $0 |
Value at Withdrawal (in years)
Roth IRA (Tax-Free)
$0
Tax: $0 (tax-free!)
Traditional IRA (Taxed)
$0
Tax: $0
Growth Comparison
When Roth Conversion Makes Sense
- ✓ You expect your tax rate to be higher in retirement
- ✓ You have a long time horizon (15+ years)
- ✓ You can pay the conversion tax from other funds
- ✓ You're in a low-income year (job loss, sabbatical, early retirement)
- ✓ You want to avoid RMDs in retirement
- ✓ You want to leave tax-free money to heirs
When to Avoid Roth Conversion
- ✗ You expect your tax rate to be lower in retirement
- ✗ You're retiring soon (short time horizon)
- ✗ You'd have to use the converted funds to pay taxes
- ✗ The conversion would push you into a higher tax bracket
What is a Roth Conversion?
A Roth conversion is when you move money from a Traditional 401k or IRA to a Roth IRA. You pay taxes on the converted amount now, but all future growth and withdrawals are tax-free. Also see our Roth IRA Calculator for contribution planning.
Key Benefits
- Tax-free growth forever - No taxes on future gains
- Tax-free withdrawals - No taxes in retirement
- No RMDs - Unlike Traditional IRAs, Roth IRAs have no Required Minimum Distributions
- Tax diversification - Balance taxable and tax-free income in retirement
- Estate planning - Leave tax-free money to heirs
How Roth Conversions Work
Step-by-Step Process:
- Choose the amount to convert from Traditional 401k/IRA to Roth IRA
- The converted amount is added to your taxable income for the year
- Pay income tax on the conversion (no 10% early withdrawal penalty)
- Money grows tax-free in the Roth IRA
- Withdraw tax-free after age 59½ and 5 years from conversion
Important: There are NO income limits for Roth conversions (unlike Roth IRA contributions).
Strategic Timing for Roth Conversions
Best Times to Convert
- Low-income years - Job loss, sabbatical, early retirement, business loss
- Market downturns - Convert when account values are temporarily low
- Before RMDs start - Convert before age 73 to reduce future RMDs
- After retirement, before Social Security - Gap years with lower income
- Spread over multiple years - Convert gradually to stay in lower tax brackets
Tax Bracket Management
Convert just enough to "fill up" your current tax bracket without jumping to the next one.
Example: You're married filing jointly with $100,000 taxable income (22% bracket)
The 22% bracket ends at $201,050 in 2026
Smart conversion: Convert $101,050 to stay in 22% bracket
Avoid converting more and jumping to 24% bracket
Paying the Conversion Tax
How you pay the tax significantly impacts the value of the conversion:
| Payment Method | Pros | Cons |
|---|---|---|
| Pay from other funds | Full amount grows tax-free, maximizes benefit | Requires cash available |
| Withhold from conversion | No cash needed | Less money in Roth, 10% penalty if under 59½ |
Best practice: Always pay conversion tax from outside funds if possible.
The 5-Year Rule for Conversions
Each Roth conversion has its own 5-year clock for penalty-free withdrawals:
- You can withdraw the converted amount penalty-free after 5 years (regardless of age)
- If you're under 59½ and withdraw before 5 years, you pay 10% penalty
- After age 59½, the 5-year rule doesn't matter for conversions
- Each conversion starts its own 5-year clock
Example: You convert $50,000 at age 56
At age 59: Can't withdraw without 10% penalty (only 3 years)
At age 61: Can withdraw penalty-free (5+ years and over 59½)
Roth Conversion Ladder Strategy
A Roth conversion ladder allows early retirees to access retirement funds before age 59½ without penalties.
How It Works:
- Convert a portion of Traditional IRA to Roth IRA each year
- Wait 5 years for each conversion
- After 5 years, withdraw that conversion penalty-free
- Repeat annually to create a "ladder" of accessible funds
Popular with FIRE movement: Allows access to retirement funds in your 40s and 50s.
Frequently Asked Questions
Is there a limit on how much I can convert to a Roth IRA?
No! Unlike Roth IRA contributions (which have income limits), there are no limits on Roth conversions. You can convert any amount at any income level.
Do I pay the 10% early withdrawal penalty on a Roth conversion?
No. You only pay ordinary income tax on the conversion. The 10% penalty does NOT apply to conversions (though it may apply if you withdraw the converted amount before 5 years and age 59½).
Should I convert my entire Traditional IRA to Roth at once?
Usually no. Converting a large amount at once could push you into a much higher tax bracket. It's often better to spread conversions over multiple years to manage your tax liability.
Can I undo a Roth conversion?
No. The Tax Cuts and Jobs Act of 2017 eliminated Roth conversion "recharacterizations." Once you convert, it's permanent. Plan carefully before converting.
When should I do a Roth conversion?
Best times: low-income years, market downturns, before RMDs start (age 73), after retirement but before Social Security, or gradually over multiple years to stay in lower tax brackets.
How do I pay the tax on a Roth conversion?
Best option: Pay from other funds (savings, taxable accounts) so the full converted amount grows tax-free. Avoid withholding from the conversion itself, especially if under 59½ (triggers 10% penalty on withheld amount).
Does a Roth conversion affect my Social Security or Medicare?
Yes, temporarily. The conversion increases your MAGI for that year, which could affect Medicare premiums (IRMAA) and Social Security taxation. Plan conversions carefully if you're on Medicare.
Can I convert my 401k to a Roth IRA while still employed?
It depends on your plan. Some 401k plans allow "in-service" conversions after age 59½. Check with your plan administrator. You can always convert after leaving your job.