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⚙ Calculator coming soon — use the information below to calculate manually.
A Roth IRA conversion moves money from a Traditional IRA (or 401k) into a Roth IRA. You pay ordinary income tax on the converted amount today — the trade-off is that the money then grows completely tax-free and all future withdrawals are tax-free. Whether this makes sense depends on your current tax rate, expected future tax rate, and how many years the money has to grow tax-free.
If you convert $50,000 and pay 22% tax ($11,000) today, you need enough years of tax-free growth to recover that $11,000 cost. At 8% growth, that $50,000 generates $4,000 in year 1. After taxes at 22%, you keep $3,120 versus $4,000 in Roth. The Roth advantage is $880/year. Break-even: $11,000 / $880 = 12.5 years. After that, every year is pure Roth advantage.
There is no income limit on Roth conversions — anyone can convert regardless of income. The converted amount is added to your taxable income for the year. You can do partial conversions to stay within a tax bracket. You have until October 15 of the following year to pay the tax (through estimated payments). Do not withhold tax from the conversion itself — pay from outside funds to maximize the conversion benefit.
Conversion makes the most sense when: you are in a temporarily low-income year (job change, sabbatical, early retirement before Social Security), tax rates are expected to rise, you will not need the money for 10+ years, you have outside funds to pay the conversion tax, and you want to reduce future Required Minimum Distributions (RMDs). It makes less sense if you need the money within 5 years or expect to be in a lower bracket in retirement.
Use this calculator as a starting point, not a final answer. Run three scenarios: pessimistic (lower returns, higher costs, worst-case tax rates), base case (your expected scenario), and optimistic (favorable conditions). The range between these three scenarios tells you how much uncertainty surrounds your plan and how much buffer you need.
Once you have your numbers, cross-reference them with complementary calculators. A mortgage payment should be checked against your overall budget and DTI ratio. A retirement projection should account for Social Security income, potential pension, and healthcare costs in retirement. Tax calculations should be checked against available deductions and credits you may qualify for. No single calculator captures everything.
Where you hold investments matters as much as what you hold. High-growth assets belong in Roth accounts where growth is tax-free. Income-producing assets like bonds belong in traditional 401(k) or IRA where taxes are deferred. Tax-managed index funds belong in taxable brokerage where you can harvest losses. This asset location strategy adds 0.2-0.4% annually to after-tax returns without changing your investments at all.
The lifetime value of proper tax planning for a median American household is approximately $150,000-300,000 in additional wealth at retirement — the difference between tax-smart and tax-naive investment management over 30 years. Most of this benefit comes from three decisions made once: choosing the right account types, maximizing employer match, and selecting low-cost index funds.