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 2024.

How will you pay your conversion taxes?

Current Age (must be under 72)

Retirement age (must be greater than current age, 72 or less)¹

Estimated total balance of traditional IRA to be converted

Estimated nontaxable amount²

Expected annual rate of return

Estimated tax rate in current year

Estimated tax rate in future years up to year of retirement

Estimated tax rate at retirement

Side fund tax rate³

Apply 10% penalty tax at conversion?⁴

¹The age 72 limit is solely for calculator purposes and does not reflect any legal limits or requirements (extending the age range beyond age 72 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.

⁴ Applies only if you elect to pay conversion taxes from IRA assets.