A Roth conversion moves money from a traditional IRA or 401(k) into a Roth IRA. The converted amount is added to your taxable income for the year, so you pay income tax now in exchange for tax-free growth and withdrawals in the future. There is no income limit or cap on how much you can convert in a single year.
The key question is whether the tax you pay today is less than the tax you would pay on future withdrawals. That depends on your current marginal rate, your expected retirement rate, state taxes, and whether the conversion pushes you into the Net Investment Income Tax (NIIT) threshold.
| Factor | Favors Converting | Favors Waiting |
|---|---|---|
| Current vs. retirement rate | Current rate is lower | Retirement rate will be lower |
| Time horizon | Many years until withdrawal | Withdrawing soon |
| RMDs | Want to avoid future RMDs | RMDs fit your spending needs |
| Estate planning | Leaving tax-free assets to heirs | Heirs will be in a lower bracket |
Example: A single filer with $80,000 of taxable income who converts $50,000 from a traditional IRA to a Roth IRA will pay federal tax on $130,000 total. The additional federal tax on the conversion is the difference between tax on $130,000 and tax on $80,000 -- roughly $11,000 at the 22% bracket, plus any applicable state tax and NIIT.
Model the exact tax cost of converting traditional IRA or 401(k) funds to a Roth IRA for 2026.
This calculator provides estimates for informational purposes only. It does not account for all factors that may affect your tax situation, such as itemized deductions, AMT, Medicare premium surcharges (IRMAA), or the pro-rata rule for partially deductible IRAs. Consult a qualified tax professional for advice specific to your situation.
If you have a year with unusually low income -- early retirement before Social Security kicks in, a sabbatical, or a business loss year -- you can fill up the lower tax brackets with a conversion at a bargain rate.
Required minimum distributions from traditional IRAs begin at age 73 (75 starting in 2033). These forced withdrawals can push you into higher brackets and increase Medicare premiums. Roth IRAs have no RMDs during the owner's lifetime, giving you more control over retirement income.
Inherited Roth IRAs are income-tax-free to beneficiaries (though they must still be distributed within 10 years under the SECURE Act). If your heirs are in high tax brackets, a Roth conversion effectively prepays their tax at your rate.
Having both traditional and Roth accounts gives you flexibility to manage your tax bracket in retirement. You can draw from the Roth in years when additional income would push you into a higher bracket or trigger IRMAA surcharges on Medicare premiums.
Avoid converting if you need to use IRA funds to pay the conversion tax (this reduces the amount growing tax-free). Be cautious if the conversion pushes you above IRMAA thresholds or into the 3.8% NIIT zone. If you are over 63 and plan to withdraw within a few years, the tax-free growth window may be too short to justify the upfront cost.
Need help with a Roth conversion strategy?
Roth conversions involve complex trade-offs including Medicare surcharges, the pro-rata rule, and multi-year tax planning. A tax professional can build a conversion ladder tailored to your retirement timeline.
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