Should You Convert Your IRA to a Roth?
A Roth conversion moves money from a pre-tax traditional IRA into a Roth IRA, triggering ordinary income tax now on the amount you convert in exchange for tax-free growth and no future required minimum distributions. Whether it pays off depends mostly on your tax rate now versus your tax rate in retirement. If you convert $50,000 while sitting in the 12% bracket, you pay about $6,000 in federal tax today so that the entire balance grows tax-free for the rest of your life. 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 to Use the Roth Conversion Calculator
- Enter your conversion amount and current balance. Put in how much of your traditional IRA you want to convert this year and the total balance you are starting from.
- Set your tax rates. Enter your tax rate today and your expected tax rate in retirement, plus the years you expect the money to grow and an annual growth rate.
- Compare the two outcomes. The calculator shows after-tax dollars at retirement for converting now versus staying traditional, along with the break-even point.
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. There is no income limit on conversions, so even high earners who cannot contribute directly to a Roth can convert.
The decision usually comes down to one comparison: the tax rate you pay on the conversion today versus the tax rate you would pay on withdrawals later. Pay tax at a low rate now, and you lock in tax-free growth. Pay tax at a high rate now to avoid an even higher rate later, and you still come out ahead. The hard part is estimating your future bracket, which is where the calculator helps.
The Low-Income “Gap Year” Strategy
The best window for many people is the stretch of years after they stop working but before Social Security and required minimum distributions begin. In those gap years your taxable income can drop sharply, which means there is room to convert at a low rate. A common move is to convert just enough to “fill up” the 12% or 22% bracket without spilling into the next one.
This matters because required minimum distributions start at age 73 and are calculated on your full traditional balance. Left unconverted, a large IRA can force big taxable withdrawals later, stacking on top of Social Security and pushing you into a higher bracket. Converting during gap years shrinks the traditional balance that drives those future RMDs.
How Robert uses the calculator. Robert is 60, retired early, and will not claim Social Security until 67. He has a $400,000 traditional IRA and, with no paycheck this year, his taxable income is low. That gives him room to convert about $40,000 and still stay inside the 12% federal bracket.
He enters a $40,000 conversion, a 12% tax rate today, and a 22% expected rate in retirement (he expects RMDs and Social Security to push him up later). The calculator shows he pays roughly $4,800 in tax now. Because that same money would have been taxed at 22% later, converting saves him about $4,000 on this slice alone, and everything it earns from here grows tax-free.
Robert decides to repeat the move for several gap years, converting $40,000 each year until he claims Social Security. He pairs the strategy with a guaranteed product inside the Roth so the converted dollars grow safely while he waits.
Holding a MYGA Inside a Roth
Once money is inside a Roth, the growth is tax-free, so a guaranteed, predictable return is a natural fit. A multi-year guaranteed annuity (MYGA) works like a CD issued by an insurance company: it locks in a fixed rate for a set term, with no market risk. As of 2026, top MYGA rates run roughly 5.0% to 6.3% depending on term and carrier. Held inside a Roth, that guaranteed interest compounds with no tax drag and comes out tax-free in retirement.
This pairing appeals to gap-year converters who want certainty. After paying tax to convert, the last thing many retirees want is to watch the converted balance swing with the market. A MYGA locks the rate so the Roth grows on a known schedule. We work with 90+ top annuity companies, so our team can shop the best guaranteed rate for the term you need.
When a Roth Conversion Wins
- Your retirement tax bracket will be higher than today’s. If you expect higher income in retirement from RMDs, pensions, and 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 do not 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 several moving parts:
- State income tax (some states tax conversions, some do not)
- IRMAA Medicare premium brackets (a conversion can spike one or two years of Medicare premiums)
- Provisional income for Social Security taxation, which the Social Security claiming calculator can help you think through
- Net Investment Income Tax (NIIT)
- The 5-year rule on converted Roth dollars
Roth conversions are complex and the numbers are personal. Confirm the specifics with a tax professional before you execute. For more on the official rules, see the IRS Roth IRA guidance and the IRS rollovers and Roth conversions FAQ. When you are ready to look at the guaranteed-growth side, explore our full set of annuity calculators or request a no-obligation MYGA quote.
Frequently Asked Questions
Do I pay a penalty when I convert to a Roth?
No. A conversion itself does not trigger the 10% early-withdrawal penalty, even if you are under 59 and a half. You owe ordinary income tax on the converted amount, but there is no penalty on the conversion. The penalty can apply only if you later pull out converted dollars too soon, which is what the 5-year rule governs.
What is the 5-year rule on a Roth conversion?
Each conversion starts its own 5-year clock on the converted principal, separate from the 5-year clock on Roth earnings. If you are under 59 and a half and withdraw converted dollars before that conversion’s five years are up, the 10% penalty applies to that amount. Once you are past 59 and a half, the conversion 5-year rule no longer triggers a penalty.
Can I undo a Roth conversion?
No. Recharacterizations of conversions were eliminated by the 2017 Tax Cuts and Jobs Act. Once you convert, you cannot reverse it, which is why converting in measured annual amounts rather than one large lump sum is usually safer.
Will a Roth conversion raise my Medicare premiums?
It can. A conversion adds to your modified adjusted gross income, and Medicare uses that income (from two years prior) to set IRMAA surcharges on Part B and Part D premiums. A large one-year conversion can push you into a higher IRMAA tier for a single year. Spreading conversions across several years helps you stay under the thresholds.
Do Roth IRAs have required minimum distributions?
No. Roth IRAs have no required minimum distributions during the original owner’s lifetime, which is one of their biggest advantages. That is why converting traditional dollars to a Roth shrinks the balance that drives future RMDs and gives you more control over your taxable income in retirement.
