Roth Conversion Calculator 2026

What Is a Roth Conversion?

A Roth conversion is the deliberate transfer of pre-tax retirement funds — traditional IRA, SEP IRA, SIMPLE IRA, or 401(k) — into a Roth IRA. The converted amount becomes taxable income in the year of conversion. You pay the tax bill now. In exchange, those funds grow tax-free indefinitely, and qualified withdrawals in retirement are completely tax-free.

The core question the calculator answers: is it better to pay taxes now at your current rate, or leave the money in a traditional account and pay taxes later at your retirement rate? The answer hinges on the relationship between your current and future marginal tax rates — and on how you pay the conversion tax.

How the Roth Conversion Math Works

Step 1: Calculate the tax cost of converting

Tax Due = Conversion Amount × Your Current Marginal Rate

This amount is added to your ordinary income for the year and taxed accordingly. It does not receive capital gains treatment.

Step 2: Project the Roth value at retirement

If paying taxes from outside savings (leaving full amount in Roth):

Roth Value = Conversion Amount × (1 + Annual Return)^Years

If paying taxes from the converted amount itself:

Roth Value = Conversion Amount × (1 − Current Rate) × (1 + Annual Return)^Years

Step 3: Project the traditional (after-tax) value at retirement

Traditional After-Tax = Conversion Amount × (1 + Annual Return)^Years × (1 − Retirement Rate)

Step 4: Calculate the break-even retirement rate

For outside-funds scenario: Break-Even Rate = Current Rate ÷ (1 + Current Rate)

For from-conversion scenario: Break-Even Rate = Current Rate

The from-conversion break-even is intuitive: Roth wins if retirement rate > current rate. The outside-funds break-even is counterintuitive: Roth wins even if your retirement rate is slightly lower than your current rate, because paying taxes from outside savings effectively puts more dollars into the tax-advantaged Roth account.

A Worked Example

Alex is 45 and in the 22% marginal bracket. Alex has $100,000 in a traditional IRA and is considering converting it to Roth. Expected retirement in 20 years at a 20% marginal rate. Expected annual return: 7%. Alex will pay the conversion tax from a taxable savings account.

Tax bill today: $100,000 × 22% = $22,000 due this year

Roth value at retirement: $100,000 × (1.07)^20 = $100,000 × 3.870 = $387,000 (fully tax-free)

Traditional value after retirement tax: $387,000 × (1 − 20%) = $309,600

Roth advantage: $387,000 − $309,600 = $77,400 more in after-tax wealth

Break-even retirement rate: 22% ÷ (1 + 22%) = 22% ÷ 1.22 = 18.0%

Even though Alex’s expected retirement rate (20%) is lower than the current rate (22%), converting still wins because the break-even is only 18%. Alex comes out ahead by converting.

The Complete Roth Conversion Guide

Paying Taxes from Outside Savings vs. From the Conversion

The single most important variable in the Roth conversion analysis is where the tax payment comes from.

From outside savings (recommended): You pay $22,000 from your bank account or taxable investment account. The full $100,000 goes into Roth. This is mathematically optimal because you’re moving after-tax dollars into a tax-free account — effectively “laundering” money that would otherwise be taxed at your ordinary rate in retirement.

From the converted amount: $22,000 is withheld from your $100,000 conversion. Only $78,000 enters Roth. This is equivalent to a smaller conversion plus the tax — you never get the compounding benefit on the withheld portion. This approach also creates a separate problem: if you’re under 59½ and withhold from the conversion for taxes, the withheld amount may be treated as a distribution subject to the 10% early withdrawal penalty.

The rule of thumb: always pay conversion taxes from outside savings if possible. If you don’t have outside savings to cover the tax, the conversion is likely premature.

Identifying Your Conversion Window

The ideal Roth conversion window is a period when your taxable income is unusually low — creating a temporary gap between your normal income and the top of your current tax bracket. Common windows:

Early retirement before Social Security. If you retire at 60 and delay Social Security to 70, you may have 10 years of reduced income before RMDs begin at 73. This window is one of the most powerful conversion opportunities available.

Job transition or sabbatical years. A year of part-time income or unemployment opens space in lower brackets that can be filled efficiently with Roth conversions.

Years with large deductions. Significant charitable contributions, high business losses, or large medical deductions in a given year reduce your effective taxable income — expanding the conversion window.

Pre-RMD years. Required Minimum Distributions begin at age 73 (SECURE 2.0) and force you to recognize income whether you need it or not. Converting before 73 reduces the traditional IRA balance, which directly reduces future RMDs and the tax drag they carry.

Partial Conversions: Filling the Bracket

The most tax-efficient approach is rarely to convert everything at once. Instead, convert just enough each year to fill the current tax bracket to its top — keeping the marginal rate below the threshold for the next bracket.

Example: You’re married, filing jointly. After deductions, your taxable income is $80,000. The top of the 22% bracket for MFJ in 2026 is approximately $201,050. You have $121,000 of remaining space in the 22% bracket. Converting $121,000 of traditional IRA funds fills that space exactly — all at 22%, with none spilling into 24%.

Repeat this annually during your conversion window, and you can systematically shift a large traditional IRA balance into Roth at known, controlled tax rates.

IRMAA: The Hidden Cost for Retirees

Medicare Income-Related Monthly Adjustment Amount (IRMAA) is a surcharge added to Medicare Part B and Part D premiums for higher-income beneficiaries. It’s based on income from two years prior — so a large Roth conversion at age 63 affects Medicare costs at age 65.

IRMAA surcharges begin when Modified Adjusted Gross Income (MAGI) exceeds approximately $106,000 (single) or $212,000 (MFJ) in 2026. Depending on the conversion size, IRMAA can add $1,000–$8,000 per year per person to Medicare costs.

For retirees approaching Medicare eligibility, IRMAA is a real constraint on conversion size. Model conversions carefully to avoid crossing IRMAA thresholds unnecessarily.

Roth Conversions and RMDs

Required Minimum Distributions are mandatory annual withdrawals from traditional IRAs beginning at age 73. RMDs are calculated as account balance ÷ IRS life expectancy factor. Because RMDs are ordinary income, large traditional IRA balances in retirement often push retirees into higher brackets than they anticipated — especially when combined with Social Security and pensions.

Roth IRAs (and, as of SECURE 2.0, designated Roth 401(k)s) have no RMD requirement during the owner’s lifetime. Every dollar converted from traditional to Roth before 73 is a dollar that will never generate a forced taxable distribution. Over a large balance and many years of conversion, this represents significant tax planning leverage.

The 2026 Tax Landscape

The Tax Cuts and Jobs Act individual provisions originally enacted in 2017 affect the rate structure applicable to Roth conversions. Federal marginal rates in 2026 are 10%, 12%, 22%, 24%, 32%, 35%, and 37% for standard brackets. Check your specific bracket based on filing status and anticipated taxable income, factoring in the standard deduction ($16,150 single / $32,300 MFJ for 2026 estimates).

State income tax is an additional consideration. Nine states have no income tax (FL, TX, NV, WA, WY, AK, SD, TN, NH), which meaningfully improves Roth conversion economics for residents. High-income-tax states (CA at 13.3%, NY at 10.9%) add a real cost to conversions completed while residing there — conversions done after a planned move to a no-income-tax state can save substantially.

Key Assumptions and Limitations

Marginal rates are applied uniformly. The calculator uses your stated marginal rate for the entire conversion amount. In practice, a large conversion may push income across multiple brackets. For large conversions, model the blended effective rate rather than the pure marginal rate.

Investment returns are constant. The calculator assumes a fixed annual return. Real returns fluctuate, but the long-run direction of the analysis — whether Roth or traditional wins at a given rate differential — is stable across reasonable return assumptions.

State taxes are not included. Add your state marginal rate to the federal rate when evaluating total conversion cost if your state taxes ordinary income.

IRMAA, Social Security taxation thresholds, and Medicare surtax are not modeled. Large conversions in retirement can trigger these secondary tax effects. Use the calculator as a baseline; consult a tax professional for large conversions near these thresholds.

The 5-year rule is not modeled. Conversions made less than 5 years before anticipated withdrawals (for those under 59½) may trigger a 10% penalty on the principal. This calculator is most accurate for conversions where funds will remain in Roth for at least 5 years.