Calculator

Roth conversion calculator

A conversion trades a known tax bill today for tax-free growth, smaller RMDs, lower Medicare IRMAA surcharges and a cleaner inheritance. This tool prices both sides and shows the year the trade turns positive.

Assumptions

Tax due this year
$24,000
24% marginal
Breakeven
Age 63
1 years
After-tax edge at 92
$54,086
Conversion ahead

After-tax value: convert vs. leave it in the IRA

Both paths measured net of every tax still owed, so they are directly comparable.

What the conversion costs and buys

You are converting at 24% to avoid 28% later — a 4 point spread in your favor. Roughly $2,126 of annual RMD-driven tax is removed once RMDs begin.

How to read a Roth conversion decision

The headline question is simple: is the marginal rate you pay to convert today lower than the rate those dollars would face when they eventually come out? What makes it hard is that the future rate is not just your tax bracket. It includes the bracket your surviving spouse files in alone, the bracket your children are in during their ten-year inherited IRA window, the share of Social Security dragged into taxable income, and the Medicare IRMAA surcharge tiers that behave like cliffs rather than brackets.

The four costs people forget

  • IRMAA with a two-year lookback. A conversion at 63 can raise Medicare premiums at 65. Crossing a tier by one dollar costs the full surcharge for both spouses.
  • Capital-gain stacking. Conversion income can push long-term gains and qualified dividends from the 0% rate into 15%, and can trigger the 3.8% net investment income tax.
  • Paying the tax from the IRA. Withholding shrinks the amount that reaches the Roth and wastes the tax-free compartment. Toggle that option above to see the damage.
  • State tax timing. Converting in a high-tax state before a move — or after one — can swing the answer by several points. Compare all 41 income-tax states and DC in the state tax explorer.

Where conversions usually pay

The strongest window is the gap between retirement and the start of Social Security and RMDs, when taxable income is temporarily low. Filling the 12%, 22% or 24% bracket in those years converts dollars that would otherwise be taxed at a higher rate once RMDs stack on top of benefits. Sizing that ladder year by year is exactly what the Strategy Lab does with the full engine.

Keep going

Educational modeling only, not tax advice. Results depend entirely on the assumptions you enter.