|Roth IRA Conversion Calculator
|Roth IRA Conversion Calculator|
When you convert a traditional IRA to a Roth IRA, the taxable portion of your traditional IRA (deductible contributions and earnings) is
subject to federal income tax in the year of conversion.
This calculator compares two scenarios: Scenario 1--you convert a traditional IRA; and Scenario 2--you don't convert your traditional IRA.
The calculator lets you choose whether to pay the conversion taxes from the IRA assets themselves, or from other assets. If you choose to pay income
taxes from other assets, the calculator also determines the amount you could have earned on those funds had you not converted (this calculation is
accomplished by modeling a separate "side fund").
The current year and the conversion year are assumed to be 2021.
1The age 71 limit is solely for calculator purposes and does not reflect any legal limits or requirements (extending the
age range beyond age 71 would require modeling required minimum distributions (RMDs)).
2If you have multiple IRAs, you must pro-rate your nontaxable balance among them. The IRS provides a worksheet in Publication 590-B.
3Applies only if you elect to pay conversion taxes from other (non-IRA) assets. This is the tax rate that you estimate
will apply to the side fund that you would have if you don't convert your traditional IRA to a Roth IRA (and therefore don't have to use these
funds to pay conversion taxes). This tax rate may differ from the tax rate that applies to your IRAs because, depending on the investments you
choose, earnings on the side fund may be eligible for capital gains or other special tax treatment (for example, income from certain municipal
bonds may be tax free), while IRA earnings are generally taxed upon distribution only at ordinary income tax rates.
Applies only if you elect to pay conversion taxes from IRA assets.
Any information provided has been prepared from sources believed to be reliable but is not guaranteed, does not represent all available data necessary for making investment decisions and is for informational purposes only.
This communication is strictly intended for individuals residing in the state(s) of AL, AK, AZ, AR, CA, CO, CT, DE, DC, FL, GA, GU, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OH, OK, OR, PA, PR, RI, SC, SD, TN, TX, UT and VT. No offers may be made or accepted from any resident outside the specific states referenced.
|Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2021.