Roth Conversion Calculator United States

A Roth conversion moves money from a pre-tax retirement account, such as a traditional IRA or an old 401(k), into a Roth account, where it grows tax-free and comes out tax-free in retirement. You pay income tax on the converted amount now. This Roth conversion calculator estimates that tax and shows how the net amount could grow over the years you leave it invested.

How a Roth conversion is taxed

The amount you convert is added to your ordinary taxable income for the year. There is no special conversion rate; it is taxed like a paycheck, at whatever bracket it falls into. The calculator multiplies the amount you convert by the marginal tax rate you enter. That is a simplification: a large conversion can climb through several brackets, so the effective rate on the whole amount may be higher than the rate on the first dollar. For a rough plan, use the bracket most of the conversion lands in.

Where the tax money comes from

Where you pay the tax from has a large effect on whether a conversion pays off. This tool assumes the conservative case, that the tax comes out of the converted funds. If you convert $50,000 at a 24% rate, $12,000 goes to tax and only $38,000 reaches the Roth. If you pay that $12,000 from a savings or brokerage account instead, the full $50,000 keeps compounding tax-free, which leaves a noticeably larger balance decades later. In that case your result will beat what this calculator shows.

Projecting the tax-free growth

Inside the Roth, the net amount compounds at your expected annual return with no further tax on growth or on qualified withdrawals. The calculator multiplies the net amount by one plus your return, raised to the number of years you leave it invested. A 6% return over 20 years multiplies the balance roughly 3.2 times. Roth accounts have no required minimum distributions during the original owner's lifetime, so the money can stay invested longer than in a traditional account.

When a conversion makes sense

Conversions tend to work best when your current tax rate is lower than the rate you expect in retirement, for example in a low-income year, in early retirement before Social Security starts, or after a career break. A long time horizon helps, because tax-free compounding needs years to outweigh the upfront tax, and paying the tax from outside funds helps a lot. Some people also value the estate benefit: heirs inherit a Roth free of income tax.

A worked example

Say you convert $50,000 and your marginal tax rate is 24%. The conversion tax is $12,000, leaving $38,000 in the Roth. At 6% for 20 years, that $38,000 grows to about $121,900, all tax-free when you withdraw it in retirement. A higher tax rate shrinks the amount that starts compounding, a longer horizon increases the growth, and a lower return reduces it.

Assumptions and limitations

This is a planning estimate, not tax advice. It applies one flat marginal rate to the whole conversion, so it understates the tax on a large conversion that crosses brackets and overstates it if part of the amount would be taxed at a lower rate. It assumes the tax is paid from the converted funds, uses annual compounding at a constant return, and ignores state income tax, the five-year withdrawal rule, the effect of extra income on Medicare premiums or Social Security taxation, and future changes to tax law. A Roth conversion is often irreversible, so confirm the numbers with a tax professional before you act.

About This Roth Conversion Calculator

Use this Roth conversion calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.