What is a Roth conversion?

A Roth conversion is the process of moving money from a Traditional IRA (or other pre-tax retirement account) into a Roth IRA. You pay ordinary income tax on the converted amount in the year of the conversion, but the money then grows tax-free and qualified withdrawals in retirement are also tax-free.

When does converting to a Roth IRA make sense?

Converting makes the most sense when you expect to be in the same or a higher tax bracket in retirement than you are today, when you have enough time for the Roth to grow and recoup the upfront tax cost (typically 10+ years), and when you can pay the conversion taxes from a separate savings account rather than from the conversion proceeds itself.

How much tax will I owe on a Roth conversion?

The converted amount is added to your ordinary taxable income for the year. For example, if you convert $50,000 and your marginal tax rate is 22%, you owe approximately $11,000 in additional federal income tax. State income taxes may also apply. The exact amount depends on your total income, filing status, and other deductions.

What is the 5-year rule for Roth conversions?

Each Roth conversion has its own 5-year clock. You must wait 5 years from the January 1 of the tax year in which you made the conversion before you can withdraw those converted funds penalty-free (if you are under age 59½). This is separate from the 5-year rule for Roth IRA earnings, which starts from the year you first opened any Roth IRA.

What is the 2026 income limit for Roth IRA contributions?

For 2026, direct Roth IRA contributions phase out for single filers with modified adjusted gross income (MAGI) between $150,000 and $165,000, and for married filing jointly between $236,000 and $246,000. However, there is no income limit for Roth conversions — anyone can convert regardless of income.

Retirement Planning · Tax Strategy

Roth Conversion Calculator

Find out if converting your Traditional IRA saves money long-term — and exactly when you hit breakeven.

Best if you'll be

In a higher bracket at retirement

Key advantage

Zero tax on withdrawals in retirement

Rule of thumb

Pay taxes from external savings — always

Your situation

IRA balance to convert$50,000

$5,000$500,000

Current age45 yrs

25 yrs70 yrs

Expected retirement age65 yrs

50 yrs80 yrs

Current marginal tax rate22%

10%37%

Federal marginal rate on your next dollar of income

Expected tax rate in retirement24%

10%37%

Higher than today → Roth conversion likely wins

Expected annual return7%

3%12%

How will you pay the conversion tax?

Paying from external savings keeps the full balance compounding — almost always the better choice.

✅

Roth conversion likely makes sense

Converting looks favorable — you save $46,436 more after-tax with 20 years to grow.

Scenario A: Keep Traditional IRA

Future value at retirement (pre-tax)$193,484

Taxes owed at 24%−$46,436

After-tax retirement value$147,048

Scenario B: Convert to Roth now

Tax cost today (22%)−$11,000

Full balance compounds (tax paid externally)$50,000

Future value at retirement$193,484

Taxes owed at retirement$0 (tax-free)

After-tax retirement value$193,484

Comparison

Roth after-tax value$193,484

Traditional after-tax value$147,048

Roth advantage+$46,436

Breakeven ageImmediately

This calculator provides estimates for educational purposes. Roth conversions have complex tax implications — actual results depend on your full tax situation, state taxes, filing status, and other factors. Consult a tax professional before converting.

Personalized offers

Open a Roth IRA

Top online brokers with no account minimums and commission-free trades.

Sponsored network. WalletGrower may earn a commission when you qualify with one of our partners. Rankings are independent.

When to convert — decision matrix

Your situation	Recommendation	Reason
Retirement tax rate > today	Convert now	Pay lower taxes today, avoid higher bill later
Retirement tax rate < today	Keep Traditional	Defer income until you're in a lower bracket
Same rate, 10+ years to retire	Likely convert	Tax-free growth over time overcomes upfront cost
Same rate, 5 years or fewer	Run the numbers	Short runway makes breakeven harder to achieve
Low-income year (job change, sabbatical)	Ideal window	Lower marginal rate = smaller conversion tax bill
Can pay tax from external funds	Strongly favors Roth	Full balance compounds; no drag from tax withholding

What to do next

Roth IRA rules 2026

Contribution limits, income thresholds, and the 5-year rule explained.

IRA contribution limits 2026

How much you can contribute to a Traditional or Roth IRA this year.

Compound interest calculator

See how tax-free Roth growth compounds over decades.

Frequently asked questions

Methodology

Traditional IRA future value: balance × (1 + r)^years, then reduced by retirement tax rate on withdrawal.
Roth FV (external tax payment): full balance compounds at r for all years, then withdrawn tax-free.
Roth FV (from conversion funds): (balance − tax cost) × (1 + r)^years, withdrawn tax-free.
Breakeven age: earliest year Roth after-tax value exceeds Traditional after-tax value.
All calculations are simplified federal estimates. State taxes, Medicare surcharges (IRMAA), required minimum distributions, and backdoor conversion rules are not modeled.

Updated June 2026 · Verified by the WalletGrower Editorial Team