Enter Conversion Assumptions
Use the fields below to compare the converted slice against leaving the same slice in a traditional account.
Example Data Table
This example uses sample assumptions to show how the calculator behaves with realistic values.
| Current Age | Retirement Age | Traditional Balance | Conversion Amount | After-Tax Basis | Current Combined Rate | Retirement Rate | Roth at Retirement | Traditional After-Tax | Adjusted Benefit |
|---|---|---|---|---|---|---|---|---|---|
| 45 | 65 | $300,000.00 | $120,000.00 | $15,000.00 | 27.00% | 18.00% | $464,362.14 | $380,776.95 | $-35,523.70 |
Formula Used
The calculator follows a practical comparison between converting now and leaving the same amount traditional.
1) Basis Allocation
When only part of the account is converted, after-tax basis is allocated proportionally.
Allocated Basis = After-Tax Basis × (Conversion Amount ÷ Total Balance)
2) Taxable Conversion and Tax Due
The taxable amount equals the converted amount minus the basis allocated to that conversion.
Taxable Conversion = Conversion Amount − Allocated Basis
Estimated Tax Due = Taxable Conversion × (Federal Rate + State Rate)
3) Future Value Comparison
The model compares the converted slice at retirement under both strategies.
Future Value = Starting Amount × (1 + Annual Return)Years
Traditional After-Tax Value = Traditional Future Value × (1 − Retirement Tax Rate)
4) Adjusted Net Worth View
If taxes are paid with outside cash, the calculator also shows a stricter comparison by subtracting the future value of that tax payment.
Adjusted Roth Net Worth = Roth Future Value − Future Value of Outside Tax Payment
How to Use This Calculator
Work through these steps to test your assumptions and compare outcomes clearly.
Frequently Asked Questions
These plain answers explain the main planning points without hiding any content.
1) What does this calculator compare?
It compares converting one chosen slice now against leaving that same slice traditional until retirement. It shows taxes due today, future Roth value, future traditional after-tax value, and an adjusted net worth view when taxes come from outside cash.
2) Why is after-tax basis important?
After-tax basis reduces the taxable portion of a conversion. If your source account contains basis, converting part of the account usually means some basis follows that conversion, lowering the estimated tax bill shown by the tool.
3) Why are there two benefit measures?
The account-only benefit compares retirement account values. The adjusted benefit goes further by subtracting the future value of taxes paid from outside cash. That second measure is often stricter and more realistic for household net worth.
4) What happens if taxes are paid from the converted amount?
Paying taxes from the converted amount lowers the dollars that actually reach the Roth account. That reduces compounding inside Roth and can make the conversion less attractive, especially over shorter time horizons.
5) Does this calculator include penalties?
No extra penalty logic is built into the model. It focuses on taxability, growth, inflation, and retirement comparison. Use professional advice for plan rules, withholding effects, timing issues, and any situation involving distributions outside direct plan-to-plan movement.
6) Should I convert the entire balance at once?
Not always. Large conversions may push more income into higher tax brackets or create cash-flow pressure. Many people test partial conversions across years. This calculator helps you model one amount at a time before choosing a broader strategy.
7) Why does retirement tax rate matter so much?
Traditional balances are taxed later, while Roth conversions are taxed now. If your retirement rate is expected to be higher than your current combined rate, converting can become more attractive. If lower, the opposite may happen.
8) Can I rely on this result alone?
Use it as a planning estimate, not a personal tax ruling. Real decisions can depend on brackets, withholding, state rules, Social Security interaction, Medicare effects, and plan-specific restrictions. Review important conversions with a qualified tax professional.