Roth Conversion Calculator
Should you convert your Traditional IRA to a Roth? Compare the tax cost now against decades of tax-free growth to find out.
Net Benefit of Converting
+$42,567
at retirement, compared to leaving in Traditional
Tax Cost Now
$12,000
Roth Value (tax-free)
$193,484
Traditional (after-tax)
$150,918
After-Tax Portfolio Value Over Time
Traditional IRA
Non-deductible contributions you've made
80.0% pre-tax | 20.0% basis
401(k) Information
Conversion Details
Full conversion amount goes to Roth
Tax Rates
Time Horizon & Growth
Years until retirement: 20
The Pro-Rata Rule
When converting to Roth, each conversion includes a proportional mix of pre-tax and after-tax funds across all Traditional IRAs. You cannot selectively convert only the after-tax basis.
Reverse Rollover Strategy
Rolling pre-tax IRA funds into a 401(k) isolates the after-tax basis in the IRA. The remaining basis can then be converted to Roth with reduced or zero tax impact.
Estimated Net Cost of Converting
$307,640
The reverse rollover isolates your after-tax basis, reducing the immediate tax from $6,960 to $0.
Break-even in
1 years (age 46)
Tax Due (Direct)
$6,960
Tax Due (Reverse)
$0
Taxable Portion
80.0%
Years to Retirement
20
Pro-Rata Calculation for $30,000 Conversion
Taxable Portion
$24,000
80.0% of conversion
Non-Taxable (Basis)
$6,000
20.0% of conversion
Tax Due (Direct)
$6,960
29.0% combined rate
Tax Due (Reverse)
$0
Savings: $6,960
Scenario Comparison
Compares tax cost, amount converted, and projected future value across strategies.
Break-Even Analysis
Shows projected after-tax value of Roth vs. Traditional paths over time.
Direct Conversion
Reverse Rollover First
No Conversion (Baseline)
Assumes 27.0% tax rate at withdrawal
Reverse Rollover Process Overview
- 1
Contact your 401(k) administrator
Confirm they accept incoming IRA rollovers and request the rollover form.
- 2
Initiate the rollover of pre-tax funds
Roll $120,000 from your Traditional IRA to your 401(k). Request a direct trustee-to-trustee transfer.
- 3
Wait for the rollover to complete
This typically takes 1–3 weeks. Your IRA will then contain $30,000 of after-tax basis.
- 4
Convert IRA basis to Roth
Convert $30,000 to your Roth IRA. Since the remaining balance is after-tax basis, the taxable portion is minimized.
- 5
Keep records for Form 8606
Document your basis and conversions for your tax return. Consider consulting a tax professional.
About This Analysis
This calculator provides estimates based on the inputs you supply. It assumes standard amortization and does not account for taxes, insurance, PMI, prepayment penalties, or the opportunity cost of funds. Results are for informational and educational purposes only and should not be considered financial advice. Consult a qualified professional before making financial decisions.
- ·Does not account for state-specific tax rules on Roth conversions.
- ·Assumes a constant rate of return; actual returns will vary.
- ·Tax rates shown are marginal rates; actual tax impact depends on total taxable income.
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Quick Reference
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Insights
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