Free Roth IRA conversion calculator. Analyze the tax cost of converting your Traditional IRA to Roth, calculate the break-even year, and compare projected after-tax wealth for 2025.
The Roth IRA Conversion Calculator helps you decide whether converting your Traditional IRA to a Roth IRA makes financial sense. A Roth conversion requires paying income tax on the converted amount now, but in return you get tax-free growth and withdrawals in retirement — with no Required Minimum Distributions.
The critical question is whether the upfront tax cost is worth the long-term tax-free benefit. This depends on your current tax rate, expected retirement tax rate, investment time horizon, and whether you pay the conversion tax from outside funds or from the IRA itself.
Enter your Traditional IRA balance, conversion amount, tax rates, and time horizon to see the break-even analysis and wealth comparison. Converting traditional IRA funds to a Roth triggers an immediate tax bill but eliminates future taxes on all growth and withdrawals. The decision involves weighing current tax rates against projected retirement tax rates and the time horizon for tax-free compounding.
Roth conversions can save tens of thousands in lifetime taxes, but they're not always beneficial. This calculator shows the exact break-even point where the upfront tax cost is repaid through tax-free growth, helping you time and size conversions optimally. Having a clear conversion roadmap helps you spread the tax impact across favorable years.
Tax Cost = Conversion Amount × Current Tax Rate Roth Path: (Conversion Amount − Tax from IRA or External) × (1 + return)^years Traditional Path: Conversion Amount × (1 + return)^years × (1 − retirement tax rate) Break-Even: Year when Roth after-tax > Traditional after-tax
Result: Tax cost: $12,000 | Break-even: year 14 | Roth advantage at year 20: $8,742
Converting $50,000 at a 24% tax rate costs $12,000 upfront. Paying the tax from outside funds, the full $50,000 grows tax-free in the Roth to $193,484 after 20 years. Leaving it Traditional, $50,000 grows to $193,484 but after 22% withdrawal tax yields $150,918. The Roth surpasses the Traditional (including the invested tax savings) around year 14.
Every Roth conversion has a break-even point — the year when tax-free growth overcomes the upfront tax cost. If the break-even is 10 years and you won't need the money for 25 years, the conversion is likely worthwhile. If the break-even is 30 years and you're already 70, it may not pay off in your lifetime.
The most efficient conversion strategy is "bracket filling" — converting just enough each year to fill your current bracket without bumping into the next one. For example, if your taxable income is $80,000 and the 22% bracket ends at $103,350, you could convert up to $23,350 at the 22% rate rather than paying 24% on amounts above that.
Even if you don't need the Roth funds yourself, conversions can benefit heirs. Inherited Roth IRAs must be distributed within 10 years (SECURE Act), but those distributions are tax-free. Inherited Traditional IRAs also have the 10-year rule, but distributions are taxed as income — potentially at the heir's higher rate.
A Roth conversion is most beneficial when: (1) your current tax rate is lower than your expected retirement rate, (2) you have many years for tax-free growth, (3) you can pay the tax from non-IRA funds, (4) you want to reduce future RMDs, or (5) you're in a temporarily low-income year. The ideal strategy often involves making smaller conversions across multiple years to stay within your current tax bracket.
Yes, partial conversions are very common and often the smartest strategy. Convert enough to fill your current bracket without pushing into a higher one. You can do partial conversions every year, gradually shifting your Traditional balance to Roth over time.
Each Roth conversion starts a new 5-year clock. If you withdraw converted amounts before 5 years and before age 59½, you may owe a 10% penalty (but not income tax, since you already paid it). After 59½, there's no penalty regardless of the 5-year rule. Original Roth contributions can always be withdrawn penalty-free.
Always pay from outside funds if possible. If you convert $50,000 and pay $12,000 tax from the IRA, only $38,000 goes into the Roth. Plus, the $12,000 withdrawn for tax is itself subject to the 10% early withdrawal penalty if you're under 59½. Paying externally keeps the full $50,000 growing tax-free.
Yes, the conversion amount adds to your MAGI, which can trigger higher Medicare Part B and D premiums (IRMAA) if it pushes you above $106,000 (single) or $212,000 (MFJ). This surcharge applies two years after the conversion. Factor IRMAA into your conversion planning, especially if you're near these thresholds.
No. Since the Tax Cuts and Jobs Act of 2018, Roth conversions are irrevocable. You cannot recharacterize a conversion back to a Traditional IRA. This makes it important to carefully plan the conversion amount and timing before executing.