A Roth conversion can save you tens of thousands of dollars – or cost you tens of thousands – depending on your tax brackets now versus at retirement. Use the calculator below to model both paths side by side.
Roth Conversion Calculator
Compare converting a traditional IRA to a Roth now vs leaving it traditional. Result shows after-tax dollars at retirement.
Side-by-Side at Retirement
| Convert to Roth now | |
| Leave as Traditional | |
| Roth advantage |
All values are after-tax. The Roth path assumes you pay conversion tax in year 1; the Traditional path defers tax until withdrawal. Paying conversion tax from IRA funds reduces the amount that grows tax-free. Talk to us before converting - state tax, IRMAA brackets, and Social Security taxation can all change the answer.
How a Roth Conversion Works
A Roth conversion moves pre-tax dollars from a traditional IRA, 401(k), or similar account into a Roth IRA. You pay ordinary income tax on the converted amount in the year of the conversion. After that, the money grows tax-free and qualified withdrawals are tax-free for life.
When a Roth Conversion Wins
- Your retirement tax bracket will be higher than today’s. If you expect higher income in retirement (RMDs, pensions, Social Security stacking on top of investment income), paying tax now at a lower rate is a clear win.
- You have outside funds to pay the conversion tax. Paying conversion tax from non-IRA dollars lets the full balance grow inside the Roth.
- You want to leave a tax-free inheritance. Heirs get 10 years of tax-free growth on inherited Roth IRAs versus paying ordinary income tax on inherited traditional IRAs.
- You want to reduce future RMDs. Roth IRAs have no required minimum distributions during your lifetime.
When You Should NOT Convert
- You expect your retirement tax bracket to be lower than today.
- You would have to pay conversion tax from the IRA itself, eroding the principal that grows tax-free.
- The conversion would push you into IRMAA (Medicare premium) surcharges or the next tax bracket without enough offsetting benefit.
- You plan to leave the money to charity (charities don’t pay tax on traditional IRAs, so the conversion was wasted).
What This Calculator Does Not Include
This is a directional comparison, not tax advice. Real conversion planning has to account for:
- State income tax (some states tax conversions, some don’t)
- IRMAA Medicare premium brackets (a conversion can spike one or two years of Medicare premiums)
- Provisional income for Social Security taxation
- Net Investment Income Tax (NIIT)
- The 5-year rule on converted Roth dollars
Talk to a tax advisor and your financial planner before executing. Reach out to MyAnnuityStore if you want help thinking through the annuity-funded portion of your retirement plan.
Frequently Asked Questions
Can I convert just part of my IRA?
Yes. Partial conversions are common. Many planners “fill up” a tax bracket each year by converting just enough to stay below the next threshold.
Do I have to wait 5 years to withdraw converted Roth dollars?
Each conversion has its own 5-year clock for the conversion principal (separate from the 5-year clock on Roth earnings). Withdrawing converted principal sooner triggers a 10% penalty if you’re under 59 1/2.
Should I convert my entire balance in one year?
Rarely. A large one-time conversion almost always pushes you into a higher bracket. Multi-year partial conversions are usually more tax-efficient.
Can I undo a Roth conversion?
No. Recharacterizations were eliminated by the 2017 Tax Cuts and Jobs Act. Once you convert, you can’t reverse it.
