Should I convert to a Roth IRA?
Pay taxes now or pay them later? This calculator shows you which path leaves more money in your pocket at retirement — so you can stop second-guessing and act.
This is less confusing than it sounds
The whole Roth question boils down to one bet: will your tax rate be higher now or in retirement? That's it. Everything else is detail. Traditional IRA = pay tax later. Roth IRA = pay tax now. Which wins depends on three things:
- Rate now vs rate later. Higher future rate → convert now. Higher current rate → leave traditional. Equal rates → mathematically a wash (slightly better Roth if you can pay tax from outside).
- Where the tax payment comes from. Paying conversion tax from outside the IRA (taxable brokerage) is the secret sauce — it effectively "shelters" more money in the Roth.
- Time horizon. Longer = bigger difference because compounding amplifies the spread.
Why "fill the bracket" matters
Don't convert so much that you push yourself into a higher tax bracket. The smart play is to convert just enough each year to fill your current bracket without spilling into the next one. We don't model this multi-year laddering directly, and we tax the whole conversion at the single marginal rate you enter. A big conversion can span two or more brackets — if part of it lands above your current bracket's ceiling, that slice is taxed at the next rate up and the calculator understates your tax. Either enter the higher rate or shrink the conversion until it fits inside your current bracket.
The IRMAA + RMD bonus
Two big indirect wins for Roth conversions:
- Avoid RMDs. Roth IRAs have no required minimum distributions during your lifetime. Traditional IRAs force you to withdraw starting at 73 (75 if you were born in 1960 or later) — adding taxable income whether you need it or not.
- Avoid IRMAA brackets. Higher RMDs can push your Medicare premiums into expensive surcharge tiers. Roth withdrawals don't count as MAGI. The catch: the conversion itself does count, and Medicare looks back two years — convert at 63 or later and you may pay a surcharge at 65+. This interacts with your Social Security timing — delaying SS while converting reduces your taxable income in the conversion years.
Common questions
When does a Roth conversion make sense?
When your current tax rate is lower than your expected retirement rate — paying tax now at the cheaper rate locks in savings. Also strong if you want to avoid RMDs (which start at 73, or 75 if you were born in 1960 or later), reduce IRMAA Medicare surcharges, or pass tax-free money to heirs.
Should I pay conversion tax from the IRA or from outside funds?
Outside funds (taxable brokerage or savings) is significantly better. It effectively shelters more money in the Roth. Paying from inside the IRA reduces the amount that grows tax-free and may trigger a 10% penalty if you're under 59½.
How much should I convert each year?
Convert just enough to fill your current tax bracket without spilling into the next one — this is called 'bracket filling.' Converting too much in one year pushes part of the conversion into a higher bracket, so you pay more tax than necessary.