Should You Convert Your
Traditional IRA to Roth?

How to use this calculator

A Roth conversion means paying tax on pre-tax retirement savings now, in exchange for tax-free growth and withdrawals later. The math works in your favor when your current tax rate is lower than your expected rate in retirement, when you have time for the converted amount to compound, or when you want to reduce future Required Minimum Distributions.

• 1
  Enter your pre-tax IRA or 401(k) balance
  You do not have to convert all of it. Many clients convert a portion each year over several years to manage the tax bill and stay below bracket thresholds.
• 2
  Enter how much you want to convert this year
  This amount gets added to your ordinary income for the year. Think about whether the conversion pushes you into a higher bracket, past IRMAA Medicare surcharge thresholds, or affects other income-based deductions.
• 3
  Set your current and expected future tax rates
  If you expect Social Security, RMDs, and other retirement income to push you into a higher bracket later, the conversion math improves. If your income will drop significantly in retirement, the case for converting weakens.
• 4
  Choose how you will pay the conversion tax
  Paying the tax from outside savings, such as a taxable brokerage account, is almost always better than letting the IRS take it from the converted amount. The calculator shows both scenarios.

How to interpret your results

• The break-even point is the key number.Converting to Roth costs you money today in exchange for savings later. The calculator shows when the Roth account value surpasses what the traditional account would have been worth after taxes. If the break-even is 8 years and you have 20 years of growth ahead, converting likely makes sense.
• Lower-income years are the window.The best time to convert is when your income is temporarily low: the years between retirement and when Social Security and RMDs begin, a year you take sabbatical, a year with large deductions, or early in your career. These windows close.
• Partial conversions are often smarter than full conversions.Converting just enough to fill up your current bracket, without spilling into the next one, is a disciplined strategy many clients use over 5 to 10 years. It spreads the tax bill, keeps you in a favorable rate, and systematically reduces the traditional balance.
• RMD reduction is a major reason to convert.Required Minimum Distributions from traditional accounts start at age 73 and are taxed as ordinary income. Large traditional balances create large RMDs that can push retirees into higher brackets and trigger Medicare surcharges. Reducing the traditional balance through conversions shrinks future RMDs.
• Paying tax from outside savings makes the math work better.If you pay the conversion tax from the account itself, you are converting less than you think. The calculator shows the difference. Paying from a taxable account or cash savings preserves the full Roth balance and improves the long-term outcome.

Common mistakes to avoid

• Converting in a high-income year.The conversion adds to your ordinary income. If you are at peak earnings, converting could push you into a 35% or 37% bracket, and the math rarely works in your favor at those rates. The strategy is most powerful in lower-income years.
• Forgetting about IRMAA Medicare surcharges.If your modified adjusted gross income exceeds certain thresholds, you pay higher Medicare Part B and Part D premiums for that year. A large conversion can trigger these surcharges. For clients near or in retirement, this is a real consideration.
• Assuming tax-free means no strings attached.Roth withdrawals are tax-free if you are 59 and a half or older and the account has been open for at least five years. Converting and immediately withdrawing creates a different result. The five-year rule applies separately to each conversion.
• Not accounting for state income taxes.Most states tax IRA distributions, including conversions, as ordinary income. At a 5% state rate, a $50,000 conversion adds $2,500 in state tax on top of federal. Run the full number before deciding.
• Treating Roth conversions as all-or-nothing.Many clients either convert everything or do nothing. The better approach is usually somewhere in between: a thoughtful annual strategy that converts what makes sense given your bracket, other income sources, and long-term goals.