🔄 Roth IRA Conversion Calculator

Key concepts

The Roth conversion math reduces to one question: will your marginal rate be higher or lower in retirement? If higher, converting today locks in today's lower rate and the Roth balance compounds tax-free — pure win. If lower, converting today pays a premium tax bill to dodge a cheaper future one — pure loss. If the rates are equal, the answer hinges entirely on whether you pay the conversion tax from outside funds (Roth wins by the amount the prepaid tax would have grown to in the Traditional) or from inside the conversion (mathematical wash — try the toggle in the calculator above on a 22%/22%/30yr scenario to see it). The headline US tax-policy backdrop matters here: the Tax Cuts and Jobs Act of 2017 set today's brackets unusually low and they sunset back to pre-2018 levels at the end of 2025 unless renewed. Many practitioners view 2024-2025 as a strategic conversion window for that reason.

Pay the conversion tax from outside funds — almost always. The single biggest mistake people make on Roth conversions is paying the tax out of the IRA being converted. This drains the compounding base by the amount of the tax (22% of a $50k conversion = $11k that never enters the Roth) and roughly cancels the Roth advantage at flat tax rates. Worse, if you're under 59½, the IRA dollars used to pay the tax are themselves a taxable distribution subject to the 10% early-withdrawal penalty. The clean play is to have at least a year's worth of conversion taxes in a taxable brokerage or savings account before you start a conversion ladder, and to convert only as much each year as you can pay tax on from outside. Backdoor Roth contributions ($7k/yr for under-50s in 2026) are the rare exception where the conversion is immediate and the tax base is roughly zero anyway.

The 5-year rule has two flavours and you must respect both. The first 5-year rule applies to each conversion separately: converted principal cannot be withdrawn without the 10% penalty until 5 calendar years from January 1 of the conversion year (so a conversion in November 2026 unlocks January 1, 2031). The second 5-year rule applies to earnings: Roth earnings can be withdrawn tax-free only after both 5 years from your first Roth contribution AND age 59½. These two clocks run independently. The practical effect for early retirees is the “Roth conversion ladder” — convert a year's worth of expenses every year starting 5 years before you need it, and you can fund early retirement out of seasoned Roth conversions before age 59½ without penalty.

Backdoor Roth basics for high earners. Direct Roth IRA contributions phase out at modified-AGI of $161,000 single / $240,000 married-filing-jointly for 2026, which excludes most dual-income professionals. The backdoor route: make a nondeductible contribution to a Traditional IRA ($7,000 in 2026, $8,000 if 50+), then immediately convert it to a Roth IRA. Because the contribution wasn't deducted, the conversion has zero (or near-zero) taxable amount — you've essentially made a Roth contribution that the income limits would have blocked. The catch is the pro-rata rule: if you already hold pre-tax money in any Traditional IRA, the IRS treats all your Traditional IRA balances as one pool and pro-rates the taxable portion of any conversion against that pool. The fix is usually to roll your pre-tax Traditional IRA balances into a 401(k) (which is excluded from the pro-rata calc) before doing the backdoor, then keep the Traditional IRA empty except for fresh nondeductible contributions.

Conversion ladders fund early retirement before 59½. The FIRE community's favourite Roth move is the “Roth conversion ladder”: starting five years before you plan to retire (or each year of early retirement), convert exactly one year's worth of spending from Traditional IRA / 401(k) to Roth IRA. Five years later, that converted principal becomes withdrawable penalty-free (per the per-conversion 5-year rule above). Run the ladder annually and you can fund a 30-year early retirement entirely from seasoned Roth conversions — taxed at unusually low brackets (you have no W-2 income in early retirement), with no 10% penalty, no Social Security clawback, no required minimum distributions. The calculator above models a single conversion in isolation; for a multi-year ladder, run it once per year with that year's tax-rate assumption.

Three common mistakes that wreck a conversion. First, the IRMAA cliff: large conversions can push your modified-AGI into one of the higher Medicare Part B / D premium brackets, which adds $1,000-$5,000 of surcharge per spouse for two years. Second, the ACA premium-credit cliff: for early retirees on a Marketplace plan, a conversion that pushes household income over 400% of the federal poverty line eliminates premium tax credits entirely — often a $10,000-$20,000 effective tax bump on the conversion. Third, the pro-rata rule blindspot: people who built up pre-tax Traditional IRA balances over decades and then try to backdoor-Roth $7,000 a year discover the entire conversion is largely taxable, not nondeductible-contribution-tax-free. None of these are deal-breakers; they're just inputs the simple Convert-vs-Don't math doesn't catch. Always model the conversion year's full federal return — not just the marginal-rate decision — before pulling the trigger.