Finance

Roth Conversion Calculator

Free Roth conversion calculator for 2026. See the taxable/tax-free pro-rata split, federal and state tax cost, bracket filling, Medicare IRMAA surcharges, and the break-even future tax rate before you convert.

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What is Roth Conversion Calculator?

A Roth conversion moves money from a traditional, pre-tax retirement account into a Roth account, where it grows tax-free and is withdrawn tax-free after the five-year clock and age 59 and a half. The trade-off is simple to state and hard to get right: you pay tax today at your current marginal rate so your heirs and your future self never pay tax again. This calculator quantifies that trade-off with the three numbers that actually decide whether a conversion wins, namely the IRC 408(d)(2) pro-rata split that determines how much of the conversion is taxable, the federal bracket your conversion stacks on top of, and the Medicare IRMAA surcharge two years later. Most people who run the numbers discover that the winning move is not one dramatic conversion but a series of moderate ones that fill a bracket each year while income is temporarily low. That is exactly what the bracket-fill and multi-year plan modes here are built to find.

When to Use This Calculator

  • Before you actually convert, to size the amount that fills your bracket without triggering a higher rate or an IRMAA tier.
  • In a low-income year between retirement and Social Security, when unused bracket room is cheapest to fill.
  • When you are deciding whether to convert now or wait, by comparing the break-even future rate with your expected retirement rate.
  • While planning required minimum distributions, to see how many years of conversions it takes to shrink the pre-tax balance to a target.
  • When you have substantial basis and want to confirm how much of a planned conversion would really be taxable.
  • For estate planning meetings, to show heirs the after-tax difference between inheriting a pre-tax IRA and a Roth.

Steps:

  1. List every traditional, SEP and SIMPLE IRA balance on December 31 and the nondeductible basis already reported on Form 8606.
  2. Subtract the standard deduction from your other annual income to find the taxable income the conversion will stack on top of.
  3. Apply the pro-rata rule to split the conversion into its taxable and tax-free portions across the whole IRA pool.
  4. Compute the federal tax with and without the conversion on 2026 brackets, then add state tax on the taxable portion.
  5. Compare the break-even future rate with your expected retirement tax rate and check the IRMAA tier two years out before you commit.

Formula

The taxable share of any conversion follows the pro-rata rule: taxable = conversion times pre-tax balance divided by the sum of pre-tax balance and basis. The tax cost is the federal tax on taxable income with the conversion stacked on other income, minus the federal tax without it, plus state tax on the taxable portion. The break-even future tax rate is the pre-tax share times the effective rate on the conversion. In the multi-year plan the remaining pre-tax balance follows B(t+1) = (B(t) minus conversion(t)) times (1 plus growth), the Roth balance compounds on the after-tax amount converted, and the break-even rate is one minus final Roth divided by the difference between the never-converted balance and the final traditional balance.

Use Cases

  • Early retirement gap years, between stopping work and the age Social Security and RMDs begin, when taxable income is unusually low.
  • After a business loss, a sabbatical, or a year of severance that drops you into a much lower bracket than usual.
  • Before required minimum distributions start at age 73, to shrink the pre-tax balance that drives those forced taxable withdrawals.
  • When you expect tax rates to rise, either because of scheduled legislative sunsets or because your own future income will be higher.
  • For estate planning, when heirs in a higher bracket would otherwise inherit a large pre-tax IRA and pay tax on every distribution.
  • When you have substantial basis from nondeductible contributions and want to convert the pre-tax layer without paying tax on the basis again.

Key Benefits

  • Shifts future growth out of the reach of the federal income tax, since qualified Roth withdrawals are never taxed again.
  • Reduces the pre-tax balance that drives required minimum distributions, lowering forced taxable income after age 73.
  • Hedges against higher future tax rates, locking in today's marginal rate instead of guessing at tomorrow's.
  • Creates tax diversification, letting you choose which account to draw from each year to manage bracket exposure.
  • Removes income tax on the account for heirs, who can stretch tax-free withdrawals instead of paying tax on distributions.
  • Lets you fill unused bracket room in a low-income year at a rate far below what the same dollars would cost later.

Pro Tips

  • Convert up to the top of your current bracket each year rather than guessing at a round dollar amount, then stop before the next bracket begins.
  • Use gap years with low income, such as the years between retirement and Social Security, as your primary conversion windows.
  • Watch the IRMAA ceiling with a two-year lookback and leave a few thousand dollars of MAGI headroom below the next tier.
  • Pay the conversion tax from outside funds whenever you can, so the full converted amount lands in the Roth and compounds tax-free.
  • Split a multi-year conversion into annual tranches rather than one lump, so each year gets its own standard deduction and bracket room.

Common Mistakes to Avoid

  • Ignoring basis. Nondeductible contributions reported on Form 8606 reduce the taxable share of every conversion across your entire IRA pool, and forgetting them overstates the tax bill.
  • Converting in a year with an unusually high income, such as a bonus year or a property sale, and landing the conversion in a bracket higher than it needed to be.
  • Ignoring the IRMAA surcharge, which is triggered two years later by the conversion and is invisible in a simple tax calculator.
  • Draining the IRA to pay the tax on a conversion in a year you are under 59 and a half and exposing the taxable portion to the early-withdrawal penalty.
  • Converting a single large amount in one year instead of spreading it across several years to fill a lower bracket repeatedly.

Key Terms Explained

Pro-rata rule:
the IRC 408(d)(2) rule that treats a conversion as coming proportionally from the pre-tax and basis layers of all your traditional IRAs combined, no matter which account you actually withdraw from.
Break-even future rate:
the retirement tax rate at which converting and not converting leave you with exactly the same after-tax wealth. Above it a conversion wins, below it a conversion loses.
MAGI:
modified adjusted gross income, the figure Medicare uses with a two-year lookback to decide whether you owe an IRMAA surcharge on Part B and Part D.
IRMAA:
the income-related monthly adjustment amount, an extra monthly Medicare premium for higher-income beneficiaries, set by CMS tiers.
Basis:
nondeductible traditional IRA contributions already taxed, tracked on Form 8606, which lower the taxable share of any conversion.
Bracket filling:
converting exactly enough to reach the top of your current marginal bracket without spilling a dollar into the next one.

Related Concepts

  • RMD Calculator: required minimum distributions start at age 73 and are driven by the pre-tax balance a conversion shrinks.
  • Roth IRA Calculator: the destination account, where converted money grows tax-free and is never subject to RMDs.
  • Retirement Calculator: widens the view from one conversion to every source of retirement income and the bracket each one lands in.
  • 401(k) Calculator: pre-tax 401(k) balances can often be rolled into an IRA and then converted on the same terms modeled here.

Example

Take a married couple filing jointly with 150,000 dollars of other income, an 800,000 dollar traditional IRA, and no basis. They convert 50,000 dollars. The standard deduction of 32,200 dollars leaves 117,800 dollars of taxable income before the conversion and 167,800 dollars after it, still inside the 22 percent bracket whose ceiling is 211,400 dollars. Federal tax rises by 11,000 dollars, so the effective rate on the conversion is 22.0 percent and the break-even future rate is also 22.0 percent because the entire IRA is pre-tax. If their tax rate in retirement is expected to exceed 22 percent the conversion wins, and if it is expected to be lower it loses. Because their MAGI rises from 150,000 to 200,000 dollars they stay under the 218,000 dollar married-filing-jointly IRMAA ceiling and keep 18,000 dollars of headroom, so no Medicare surcharge is triggered.

Interpreting Your Results

Read the effective conversion rate first and compare it with the break-even future rate. When the break-even rate is close to or above the rate you expect in retirement, the conversion is likely to win, and the ladder mode shows how much of that advantage is real after growth. Watch the IRMAA tier before and after the conversion, since a surcharge two years later can erase a small bracket advantage on its own. Finally check the net to Roth figure when the tax is paid from the IRA itself, because that is the amount that actually lands in the Roth account and compounds tax-free.

Frequently Asked Questions

How does a Roth conversion get taxed?
The taxable portion of the conversion is added to your other ordinary income for the year and taxed at your marginal federal rate after the standard deduction. Only the pre-tax share is taxable, because basis comes out tax-free under the pro-rata rule. State income tax usually applies to the same taxable portion. The conversion is not penalized just for being a conversion, but the amount you move is locked into the IRA for five years before converted principal can come out without the 10 percent early-withdrawal penalty if you are under 59 and a half.
What is the pro-rata rule and why does it matter?
The pro-rata rule under IRC 408(d)(2) says a conversion is treated as coming proportionally from the pre-tax layer and the after-tax basis layer of all your traditional, SEP and SIMPLE IRAs combined. You cannot choose to convert only the clean pre-tax dollars, and you cannot isolate basis in one account to shield another. If your whole IRA pool is 80 percent pre-tax, then 80 percent of every dollar you convert is taxable no matter which account you actually withdrew from. This is why tracking basis on Form 8606 matters so much, and why rolling only the pre-tax portion into a separate account before retiring changes the math.
What is the break-even future tax rate?
The break-even future rate is the retirement tax rate at which converting and never converting leave you with exactly the same after-tax wealth. For a fully pre-tax IRA it equals the effective tax rate you pay on the conversion today. If your expected retirement rate is higher than the break-even rate, converting wins; lower, and waiting wins. When part of your IRA is basis, the break-even rate drops, because the pre-tax share is smaller and less tax is paid now on each dollar converted.
Should I convert in one year or spread it over several years?
Spreading almost always wins when your income is otherwise stable, because each year you get a fresh standard deduction and a fresh set of low brackets to fill. A single large conversion can push part of the money into a much higher bracket and can jump you into a Medicare IRMAA tier in one move. Multi-year laddering lets you fill the same target bracket repeatedly at the lowest available rate. Convert a single lump only when you have a genuine one-year income drop, such as a business loss or a gap year before Social Security, and even then consider splitting it.
How does Medicare IRMAA interact with a conversion?
Medicare premiums for Part B and Part D are set by an income-related monthly adjustment amount, and that amount is based on your modified adjusted gross income from two years earlier. A conversion in 2026 therefore raises the surcharge you pay in 2028. In 2026 the surcharge begins above 109,000 dollars of MAGI for single filers and 218,000 dollars for married couples filing jointly, and the first tier costs roughly 95.70 dollars per person per month. Because the surcharge is a cliff rather than a slope, a conversion that crosses the threshold costs far more than one that stops a few thousand dollars short.
Does paying the conversion tax from the IRA itself change the result?
Yes, and it usually hurts. When tax is withheld from the converted amount, only the net amount lands in the Roth, but the full gross conversion still counts as income and still uses your bracket room. Worse, the withheld portion is generally treated as a distribution, so if you are under 59 and a half the taxable portion can also carry the 10 percent early-withdrawal penalty. Paying the tax from outside funds keeps the whole conversion working inside the Roth and avoids the penalty entirely.
What happens to my basis when I convert?
Basis is not taxed again. Under the pro-rata rule your conversion is split into a taxable pre-tax share and a tax-free basis share, and the basis share moves to the Roth without additional tax. The basis itself does not vanish; your remaining basis in the traditional IRA pool shrinks by the tax-free portion of the conversion, and you track the reduced basis on Form 8606. Converting is actually one of the cleanest ways to eventually get basis out of a traditional IRA, since the tax-free share lands in the Roth where it grows permanently tax-free.
Is there an income limit for converting to a Roth?
No. Since 2010 there is no income limit on making a Roth conversion, regardless of how much you earn. The limits that remain apply to direct Roth IRA contributions, not to conversions. The only real constraints are tax cost and Medicare IRMAA, both of which scale with your income. High earners can and do convert, usually in deliberately sized tranches that fill a chosen bracket, because the long-term tax-free growth is worth the one-time tax hit even at the top marginal rate.
How does the five-year rule work for conversions?
Each conversion starts its own five-year clock for penalty-free access to the converted principal. After five years you can withdraw the amount you converted at any age without the 10 percent early-withdrawal penalty, though if you are under 59 and a half ordinary income tax may still apply to earnings. The separate five-year rule for qualified Roth distributions, which makes withdrawals of earnings tax-free, depends on when you first funded any Roth IRA and is not restarted by a conversion. Having multiple conversions means keeping track of several clocks, so it helps to convert in a steady pattern rather than one isolated year.
When is a Roth conversion a bad idea?
It is unattractive when you expect your retirement tax rate to be clearly lower than today's effective rate, since you would be paying tax now at a higher rate than you would later. It is also poor in a year of unusually high income, when the conversion stacks on a bonus, a property sale, or a large capital gain and lands in a top bracket. If the conversion pushes you across an IRMAA threshold and the surcharge outweighs the bracket benefit, it can lose on its own. Finally, converting shortly before a large planned expense, when you might need the money back within five years and before 59 and a half, can expose you to the early-withdrawal penalty.
How do required minimum distributions and conversions interact?
Required minimum distributions begin at age 73 and are calculated from your December 31 pre-tax IRA balance, so every dollar you convert before that date directly reduces the balance your future RMDs are computed from. This is one of the strongest long-term arguments for converting in your sixties and early seventies, because a smaller pre-tax balance means smaller forced taxable withdrawals every year thereafter, and a smaller chance of being pushed into a higher bracket by an RMD you did not choose. Note that you cannot convert an RMD itself, since RMDs must come out first and cannot be rolled over, but conversions in the years before RMDs start are fully available.

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