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Roth Conversion

Pay taxes now — or let the IRS pick your future rate?

Model the true cost of converting a Traditional IRA to a Roth. See break-even years, tax bill, and after-tax retirement value.

$9,287

net benefit at retirement

$8,800 tax now

Your conversion

The math

Taxes due now

$8,800

Net converted

$40,000

Roth at retirement

$154,787

Traditional after tax

$111,447

Net benefit

$9,287

Freedom Coach™

Convert now — you'll come out $9,287 ahead in 20 years.

Tax bill now: $8,800 at 22%. Rule of thumb: convert when today's rate is LOWER than your future rate.

  • Convert in low-income years (early retirement, sabbatical, job change) to fill up low brackets cheaply.
  • Great: paying taxes from outside cash preserves the full converted amount.
  • Split conversions across years — a $200k conversion in one year can push you into a higher bracket unnecessarily.

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Save multi-year conversion ladder scenarios and stress-test bracket-filling strategies.

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Frequently asked questions

What is a Roth conversion?

Moving money from a Traditional IRA/401k (pre-tax) to a Roth IRA (post-tax). You pay income tax now to skip taxes on withdrawals in retirement.

When is a conversion smart?

When your current tax rate is LOWER than your expected retirement rate. Great in low-income years: sabbaticals, early retirement gap, or income dips.

How much should I convert?

Enough to 'fill up' your current bracket without pushing into the next one. Multi-year partial conversions almost always beat one big conversion.

Where should I pay the taxes from?

From OUTSIDE cash, not the conversion. Paying from the IRA shrinks the amount that gets to grow tax-free.

What's the 5-year rule?

Converted funds must sit in the Roth 5 years before penalty-free withdrawal of the converted amount (if under 59½). Growth is separate.

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