Roth Conversion Calculator 2026 — Tax Impact & Break-Even

A Roth conversion moves money from a Traditional IRA, SEP IRA, SIMPLE IRA, or Traditional 401(k) into a Roth IRA. The converted amount is added to your ordinary income for the year, and you pay income tax on it at your current marginal rate. After conversion, the funds grow tax-free in the Roth account, and qualified withdrawals in retirement are tax-free. There is no income limit on conversions (unlike direct Roth IRA contributions), so high earners who cannot contribute directly often use conversions as a planning strategy.

The core question in a Roth conversion is whether paying tax now at your current rate is better than paying tax later at your future retirement rate. Conversions tend to make sense when you are in a temporarily low tax bracket (such as early retirement before Social Security begins, or a year with unusually low income), when you expect tax rates to increase in the future, or when you want to reduce future required minimum distributions. Converting a large balance all at once can push you into a higher bracket, so many advisors recommend spreading conversions across multiple years to stay within a target bracket.

The break-even analysis compares two scenarios: converting now and paying tax from outside funds versus leaving the money in the Traditional account and paying tax on withdrawals. The break-even timeline typically ranges from 7 to 15 years. If you pay the conversion tax from the converted funds themselves (rather than from a separate taxable account), the break-even period extends significantly because you lose the compounding power of the dollars used for taxes. Using outside funds to pay the tax bill is strongly preferred.

Important considerations include the five-year rule (each conversion has its own five-year clock for penalty-free withdrawal of the converted amount if you are under 59 1/2), the impact on Medicare premiums (IRMAA surcharges are based on MAGI two years prior), and the pro-rata rule for conversions from accounts that contain both deductible and non-deductible contributions. The pro-rata rule means you cannot selectively convert only non-deductible contributions; instead, each conversion is treated as a proportional mix of taxable and non-taxable amounts across all your Traditional IRA balances.