Should you convert your Traditional IRA or 401(k) to a Roth in 2026? Enter your balances, current vs. retirement tax bracket, and a multi-year conversion ladder to see the lifetime tax savings of Path A (convert) vs. Path B (don't).
A Roth conversion moves dollars from a Traditional (pre-tax) account into a Roth (post-tax) account. The full converted amount is added to your taxable income in the year of the conversion. In exchange, all future growth and qualified withdrawals from the Roth are completely tax-free — and there's no Required Minimum Distribution at age 73 or 75 for the original owner.
The break-even math: if you expect your future tax rate to be equal to your current rate, conversion is roughly a wash on a lifetime basis (you pay tax now instead of later on the same dollars). Conversion wins decisively when:
This calculator runs both Path A (convert over a ladder) and Path B (don't convert, take RMDs and withdraw as needed in retirement), accounting for federal + state marginal brackets each year, then gives you the lifetime tax cost and benefit.
A Roth conversion is when you move money from a tax-deferred retirement account (Traditional IRA, Traditional 401(k), 403(b)) into a Roth IRA. The transferred amount is added to your taxable income for the year of the conversion, but all future growth and qualified withdrawals from the Roth are tax-free. There's no income limit on conversions and no required minimum distributions on Roth IRAs during the original owner's lifetime.
A Roth conversion usually makes sense when you expect your future tax rate to be higher than today's. The most common cases: (1) you have a low-income gap year between retirement and Required Minimum Distributions (RMDs), (2) you expect tax rates to rise (look at current budget deficits), (3) you want to leave tax-free money to heirs, (4) you have moved to a higher-tax state and are converting in a lower-tax one. The math compares your current marginal bracket to your expected retirement bracket.
There is no IRS-imposed annual cap on Roth conversions — you can convert any amount in any year. The full converted amount is added to your ordinary taxable income for that year, however, so large conversions can push you into a higher federal and state tax bracket. The pro-rata rule does NOT apply to conversions (only to backdoor Roth contributions), so you can convert from a Traditional IRA with pre-tax money regardless of your other IRA balances.
Each Roth conversion has its own 5-year clock. If you withdraw the converted amount before age 59½ AND before the 5-year anniversary of the conversion, the 10% early-withdrawal penalty applies to the converted amount (the earnings portion is always penalty-free if you meet the qualified-distribution rules). After 5 years AND age 59½, the entire balance — both contributions and earnings — can be withdrawn with no tax and no penalty.
Yes — large Roth conversions often push you above the Social Security taxable-income thresholds, causing up to 85% of your benefits to become taxable. This "tax torpedo" effect means $1 of conversion can trigger $0.15-$0.50 of additional Social Security tax. The calculator does not model this in detail, but if you are within 5 years of claiming Social Security, factor in roughly 15% additional tax on your conversion when the timing matters.
Yes — converting in a down market is one of the most powerful strategies because you buy more shares with each dollar of tax cost. Example: if your Traditional IRA balance drops 30% in a bear market, you can convert $100,000 worth of depressed shares that recover to $200,000+ by retirement, all tax-free, while the tax cost was based on the lower $100,000 balance. Many planners suggest "buy low" during downturns and pause conversions near market peaks.