Enter the amount you are thinking of converting, your marginal tax rate today, the marginal rate you expect in retirement, your time horizon and an assumed return. The tool shows the tax you would owe this year, the projected after-tax value of the Roth against leaving the money in the traditional account, and the breakeven rate — the retirement tax rate at which the two options are a wash. Under a flat-rate comparison the answer turns almost entirely on those two rates, not on the return you assume.
Your conversion
Hypothetical comparison at your assumed rate
The insight this tool exists to show. Ignore the dollar signs for a second. When the tax is paid out of the converted amount, the two columns are mathematically identical whenever your retirement rate equals your rate today — the return you assume and the number of years both cancel out. The conversion only wins if your future rate is higher. When the tax is paid from outside money, the Roth column is bigger at almost any positive retirement rate — but only because those outside dollars have quietly left the comparison. That is why the last row exists.
Assumptions used — read these before trusting the number
- Flat rates, flat return. Both marginal rates are treated as single flat rates applied to the whole amount, and growth compounds annually at the constant rate you enter. Real conversions cross brackets; real returns vary and include losses. This is an illustration, not a projection.
- IRMAA is ignored. A conversion raises your modified AGI and can raise your Medicare Part B and Part D premiums two years later, sometimes by thousands of dollars. Not modelled here at all.
- State income tax is ignored unless you build it into the rates you type. California taxes conversions as ordinary income and has no preferential rate; converting in a high-tax state and retiring in a no-tax state is a real consideration this tool cannot see.
- ACA premium subsidies are ignored. For anyone under 65 buying coverage on the exchange, a conversion can cut or eliminate the premium tax credit — an effective marginal cost far above the bracket rate.
- RMD interactions are ignored. Converting reduces future required minimum distributions from the traditional account, which is a genuine benefit not counted here — see the RMD estimator. Roth IRAs have no lifetime RMDs for the original owner.
- A conversion is irreversible. Recharacterisation of Roth conversions was eliminated by the Tax Cuts and Jobs Act for conversions made in 2018 and later. There is no undo. Once you convert, the tax is owed even if the market falls the following week.
- The pro-rata rule, the five-year rules on converted amounts, the under-59½ penalty on withdrawn conversion dollars, the net investment income tax, and the effect on your capital-gains bracket are all excluded .
- The tax due is assumed to be paid at conversion. Underpayment penalties and estimated-tax timing are not modelled.
This is an estimate, not advice. The output above is arithmetic performed on the numbers you entered, under the assumptions printed on this page. It is not a recommendation, not a projection you should rely on, and not a substitute for a conversation with your CPA or a qualified adviser about your own situation.
Common questions
Common questions
Why does the answer barely change when I change the return or the number of years?
Because under a flat-rate comparison they cancel. Converting is multiplying by (1 minus your rate today); not converting is multiplying by (1 minus your rate later). Growth multiplies both sides by the same factor. Years and returns change how big the prize is — not who wins it. That is why the two rates deserve nearly all of your attention, and why an honest tool should say so.
What if I do not know my retirement tax rate?
Nobody does — future law is unknowable. The useful exercise is to run it at several rates and see how wrong you would have to be for the decision to flip. If a conversion still looks sensible across a wide range of assumptions, the decision is robust. If it only works at one specific rate, it is a guess wearing a spreadsheet.
Can I undo a conversion if I change my mind?
No. Recharacterising a Roth conversion was permitted before 2018 and was eliminated by the Tax Cuts and Jobs Act. Contributions can still be recharacterised in some cases; conversions cannot. Treat the decision as permanent, because it is.
Should I convert a little every year instead of all at once?
Partial conversions filling a specific bracket are a common approach precisely because they avoid the bracket-crossing problem this tool glosses over. Whether that fits you depends on your income path, IRMAA thresholds, ACA status and RMD picture — which is a planning conversation, not a calculator output.
Thinking about a conversion this year?
We model conversions bracket by bracket, with IRMAA thresholds, California tax and your RMD picture in the same view — before the deadline, while it is still a choice. Fee-only, no products to sell you.