Roth IRA Conversion Calculator

What Is a Roth IRA Conversion? A Roth conversion moves money from a pre-tax Traditional IRA into a Roth IRA. You pay income tax on the converted amount today — but all future growth and qualified withdrawals are completely tax-free.

The Core Math Conversion tax cost = Balance × (current tax rate / 100)

Roth end value after n years = Balance × (1 + r)^n (The full pre-tax balance grows — no tax on withdrawal.)

Traditional end value (after-tax) = Balance × (1 + r)^n × (1 − future tax rate / 100) (The full balance grows tax-deferred, then taxed at withdrawal.)

Net Roth advantage = Roth end value − Traditional after-tax value − conversion tax cost

Worked Example Balance: $100,000 | Current rate: 22% | Future rate: 25% | Return: 7% | Years: 20

Conversion tax cost = $100,000 × 0.22 = $22,000 Roth end value = $100,000 × 1.07^20 = $386,968 (all tax-free) Traditional after-tax = $386,968 × (1 − 0.25) = $290,226 Net advantage of converting = $386,968 − $290,226 − $22,000 = $74,742

When Converting Makes Sense

• Your future tax rate is expected to be higher than today’s rate
• You have many years for tax-free growth to compound
• You want to reduce Required Minimum Distributions (RMDs)
• You can pay the conversion tax from outside funds (not from the IRA)

When Converting May Not Make Sense

• Your retirement tax rate will be lower than today
• You are close to retirement with little growth time remaining
• The conversion would push you into a much higher tax bracket this year

The 5-Year Rule Each Roth conversion has its own 5-year clock. Converted funds withdrawn before age 59½ and before 5 years may be subject to a 10% penalty. Consult a tax advisor before converting.