What is a Roth conversion and when does it make sense?

A Roth conversion moves money from a traditional IRA or 401(k) into a Roth IRA, triggering income tax on the converted amount. It makes sense when you expect your future tax rate to be higher than your current rate, when you have years of low income (such as early retirement before Social Security starts), or when you want to reduce future Required Minimum Distributions.

How much should I convert to a Roth IRA each year?

The optimal amount depends on your current tax bracket and how much room you have before jumping to the next bracket. Many planners recommend converting up to the top of your current bracket — for example, filling the 22% bracket before triggering the 24% rate. This calculator helps you find that sweet spot by showing the tax cost of different conversion amounts.

Do Roth conversions affect Medicare premiums (IRMAA)?

Yes. Roth conversion amounts are added to your Modified Adjusted Gross Income (MAGI), and Medicare uses your MAGI from two years prior to set premium surcharges (IRMAA). A large conversion in 2024 could increase your Medicare premiums in 2026. Plan conversions carefully around the IRMAA thresholds to avoid unexpected premium jumps.

Retirement

Should You Convert to a Roth IRA?

Should you convert your Traditional IRA to a Roth IRA? This free calculator models the pro-rata rule, evaluates a reverse rollover strategy when your 401(k) accepts incoming rollovers, and shows your break-even year and net benefit at retirement — no account required.

Current Monthly Payment

—

New Monthly Payment

—

Est. Interest Saved

—

Break-Even

—

Conversion Details

Conversion Amount

Current Tax Rate

Retirement Tax Rate

Time & Growth

Years to Retirement

yrs

Expected Return

Estimated Net Benefit of Converting

+$42,567

at retirement, compared to leaving in Traditional

Break-even in

1years

~age 46

Tax Cost Now

$12,000

at 24% marginal rate

Roth at Retirement

$193,484

tax-free at withdrawal

Traditional (After-Tax)

$150,918

at 22% retirement rate

After-Tax Value Over Time

Compares the after-tax value of a Roth conversion vs. keeping funds in a Traditional account. The Roth value is tax-free at withdrawal; the Traditional value is reduced by your retirement tax rate.

Traditional IRA

Total IRA Balance

After-Tax Basis (Form 8606)

Non-deductible contributions you’ve made

Pre-Tax: $120,000Basis: $30,000

80.0% pre-tax · 20.0% basis

Conversion & 401(k)

Amount to Convert to Roth

Pay taxes from outside funds

Full conversion amount goes to Roth

401(k) accepts incoming rollovers

Current 401(k) Balance

Tax Rates & Growth

2026 federal bracket reference

Taxable income thresholds (after standard deduction)

10%≤ $11,925≤ $23,850

12%$11,926–$48,475$23,851–$96,950

22%$48,476–$103,350$96,951–$206,700

24%$103,351–$197,300$206,701–$394,600

32%$197,301–$250,525$394,601–$501,050

35%$250,526–$626,350$501,051–$751,600

37%> $626,350> $751,600

SingleMFJ

Standard deduction: $16,100 (single) · $32,200 (MFJ). Source: IRS / OBBBA 2025.

Current Federal

Current State

Retirement Federal

Retirement State

Combined: 29% now → 27% retirement

Age

Retire At

Return

20 years until retirement

Estimated Net Cost of Converting

$315,740

The reverse rollover isolates your after-tax basis, reducing the immediate tax from $6,960 to $0.

Break-even in

1years

age 46

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)

saves $6,960

Break-Even Analysis

Shows projected after-tax value of Roth vs. Traditional paths over time. The shaded area represents the Roth advantage. The break-even point is where Roth first pulls ahead after accounting for the upfront tax cost.

Direct Conversion

Taxable Amount$24,000

Federal Tax-$5,760

State Tax-$1,200

Net to Roth$30,000

Future Roth Value$116,091

Reverse Rollover First

Rolled to 401(k)$120,000

Taxable Amount$0

Total Tax$0

Net to Roth$30,000

Tax Savings$6,960

No Conversion (Baseline)

Current IRA Balance$150,000

Future Value (pre-tax)$580,453

After-Tax at Retirement$431,830

Assumes 27.0% combined 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 a constant rate of return and constant tax rates throughout the projection period. Tax rates shown are marginal rates; actual tax impact depends on total taxable income. It does not account for state-specific Roth conversion rules, the 10% early withdrawal penalty (if under 59½), Medicare IRMAA surcharges, RMD avoidance benefits, or estate planning considerations. Results are for informational and educational purposes only and should not be considered tax or financial advice. Consult a qualified tax professional before making conversion decisions.

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