Roth Conversion Calculator: Traditional vs Roth vs Taxable

How the math works

Every traditional-versus-Roth question reduces to one line. Take a pre-tax dollar, a growth factor G (what $1 becomes over your horizon), and two tax rates: t_now and t_later.

Traditional: 1 × G × (1 − t_later)   vs   Roth: (1 − t_now) × G

Because multiplication is commutative, if the two rates are equal the two results are identical — it does not matter whether the tax comes out first or last. The whole decision is rate arbitrage: pay tax at the lower of the two rates. Traditional wins when today’s rate is higher; Roth wins when the future rate is higher. Everything else on this page is about estimating those two rates honestly and accounting for the things the one-liner leaves out.

Mode 1: convert now or not?

• Tax on the conversion. The converted amount is stacked on top of your other taxable income and taxed slice by slice through the 2026 brackets, so the effective rate on the conversion is usually higher than your current marginal rate — a large conversion pushes into the next bracket or two. The panel lists exactly how many dollars land in each bracket.
• Convert. If you pay the tax from outside funds, the full amount goes into the Roth and grows tax-free: amount × G. If the tax is withheld, only the remainder is converted, and if you are under 59½ the withheld part is an early distribution to which the IRS says the 10% additional tax generally applies (Tax Topic 557).
• Keep traditional. The balance grows to amount × G and is taxed at your withdrawal rate. When you would have paid the conversion tax from outside funds, that cash is not free: the calculator grows it in a taxable account at the same return and charges your capital-gains rate on the growth at the end, then adds it to the “keep” side. Skipping this step is how many calculators flatter conversions.
• Break-even rate. The withdrawal rate at which the two paths tie. Paying from the conversion, it equals the effective rate on the conversion. Paying from outside, it is a little lower, because the outside cash grows with tax drag rather than tax-free.

Mode 2: where to put new savings

Each year’s contribution is invested at the start of the year and grows at your expected return. The traditional 401(k) takes the full pre-tax amount and pays your withdrawal rate at the end. The Roth 401(k) takes what is left after tax now and pays nothing later. The taxable brokerage takes the same after-tax amount, loses a slice of its dividends to tax every year, and pays capital-gains tax on the remaining gain when sold. Two views are shown, because “$10,000 a year” means different things: on equal pre-tax dollars the Roth and taxable accounts receive less (the tax has been paid); on equal take-home dollars the traditional account receives more, since the deduction refunds part of the contribution. Both views give the same winner — the second just shows how much more you can shelter when the tax break is reinvested rather than spent.

When converting wins

• A low-income year — a sabbatical, early retirement before Social Security, a business loss — when the conversion fills the 10% and 12% brackets you would otherwise waste.
• You expect higher rates later, from a growing balance, a pension, RMDs, or a change in the law, so t_later is above the break-even.
• You can pay the tax from outside funds, keeping the whole balance compounding tax-free.
• You want no required minimum distributions. Roth IRAs have no RMDs for the original owner; see the IRS Publication 590-B for the RMD rules.
• Heirs in high brackets. A Roth passes on tax-free income; a traditional account passes on a tax bill.

When converting loses

• The tax comes out of the conversion, especially under 59½ when the 10% additional tax can apply to the withheld part.
• You are near retirement in a lower bracket. If you will withdraw at 12% in three years, paying 24% now to avoid it is simply a loss.
• The conversion is too big for the year, pushing dollars into the 32% or 35% brackets that would have been withdrawn at 22% or 24%. Converting in slices over several years fixes this — try smaller amounts and watch the bracket list.
• Other income effects. Extra income can reduce credits and deductions that phase out with income; those are outside this calculator.

There are also 5-year rules: one for tax-free earnings and one for each conversion. This tool assumes you leave the money invested past both; the details are in IRS Publication 590-B.

Tax year 2026 federal brackets (taxable income)

Source: IRS Rev. Proc. 2025-32 (brackets). Verified 2026-09-26. “Other taxable income” here is income after the standard or itemized deduction — use the take-home pay calculator to find your taxable income and bracket.

Worked example: converting $100,000

A single filer with $60,000 of other taxable income converts $100,000 and pays the tax from savings. Stacked on top of $60,000, the first $45,700 of the conversion fills the rest of the 22% bracket (up to $105,700) and the remaining $54,300 is taxed at 24%. Federal tax on the conversion is $23,086, an effective 23.1%. At 7% for 20 years, $1 grows to $3.87. Converting gives a tax-free $386,968. Not converting leaves $386,968 in the traditional account, worth $301,835 after 22% tax, plus the $23,086 of tax money grown in a taxable account to $79,398 after 15% on the gain — $381,233 in total. Converting wins by about $5,700, and the break-even withdrawal rate is 20.5%: below that, keeping the traditional account would have been better. The sensitivity table makes the stakes clear — at a 12% withdrawal rate converting loses about $33,000; at 32% it wins by about $44,000.

Worked example: $10,000 a year of new savings

$10,000 of pre-tax pay each year for 30 years at 7%, with a 24% rate now and 22% at withdrawal. On equal pre-tax dollars the traditional 401(k) grows to $1,010,730 and is worth $788,370 after 22% tax; the Roth receives $7,600 a year and ends at $768,155; the taxable account receives the same $7,600 but, after 15% tax on a 2% dividend each year and 15% on the gain at the end, finishes at $670,142. Traditional wins by the two-point rate gap — about 2.6% more — and both beat the taxable account by roughly $100,000. Flip the rates (22% now, 24% later) and the Roth wins by the same margin. On equal take-home dollars, the traditional account contributes $13,158 pre-tax to cost the same $10,000 as the Roth, ending at $1,037,329 after tax against the Roth’s $1,010,730.

Tips

• Convert in slices: fill your current bracket to the top each year rather than jumping two brackets at once.
• Pay the tax from outside funds, and set the cash aside before you convert — the bill comes with the 2026 return.
• Check the growth assumption separately in the compound interest calculator.
• Rates today are not the only variable; a large traditional balance can force high RMDs later, which is the strongest case for converting gradually before age 73.