Roth Conversion Calculator — Methodology

How This Calculator Works

This calculator models the tax impact of converting pre-tax retirement funds (Traditional IRA/401k) to a Roth IRA. It compares the future value of Roth vs. Traditional accounts, identifies bracket optimization opportunities, and flags IRMAA Medicare premium surcharges.

Inputs and Assumptions

• Filing status: Single, Married Filing Jointly, Married Filing Separately, Head of Household.
• Other ordinary income: Wages, SS, RMDs, and other taxable income (excluding the conversion).
• Traditional balance: Total pre-tax retirement account balance.
• Conversion amount: The amount you plan to convert this year.
• Years to retirement: Growth period for both Roth and Traditional accounts.
• Expected annual return: Applied equally to both Roth and Traditional accounts.
• Retirement tax rate: Your estimated marginal tax rate in retirement.

Formula

// Tax on conversion (using 2026 federal brackets, Rev. Proc. 2025-32)
taxableIncomeBefore = max(0, otherOrdinaryIncome - standardDeduction)
taxableIncomeAfter = max(0, otherOrdinaryIncome + conversionAmount - standardDeduction)
taxOnConversion = totalTax(after) - totalTax(before)
effectiveRate = taxOnConversion / conversionAmount

// Bracket headroom
headroom = currentBracketCeiling - taxableIncomeBefore
recommendedConversion = max(0, headroom)

// Future value comparison
rothFV = conversionAmount × (1 + returnRate)^years
// Roth: no tax on withdrawal

traditionalFV = conversionAmount × (1 + returnRate)^years
traditionalAfterTax = traditionalFV × (1 - retirementTaxRate)

// Net advantage: the tax paid now could have been invested instead
netAdvantage = rothFV - traditionalAfterTax - taxOnConversion × (1 + returnRate)^years
// = (1 + returnRate)^years × (conversionAmount × retirementTaxRate - taxOnConversion)
// Roth comes out ahead when retirementTaxRate > effectiveRate; equal rates are a tie

// Social Security taxation warning (26 U.S.C. 86(c))
Single / head of household: income above $34,000
Married filing jointly: above $44,000
Married filing separately (lived with spouse during the year): $0

// IRMAA warning (2026 thresholds, CMS / SSA POMS HI 01101.020)
Single: MAGI > $109,000
MFJ: MAGI > $218,000
MFS (lived with spouse): standard premium up to $109,000;
  above $109,000 the second-highest tier; $391,000+ the top tier

Data Sources

• IRS Rev. Proc. 2025-32 — 2026 federal income tax brackets and standard deductions.
• IRS Publication 590-A — IRA contribution and conversion rules.
• CMS (Centers for Medicare & Medicaid Services) — IRMAA income thresholds and premium surcharge amounts for 2026.
• SSA — Provisional income calculation for Social Security benefit taxation thresholds ($25K single, $32K MFJ for 50% taxation; $34K single, $44K MFJ for 85% taxation).

Limitations

• Uses 2026 federal tax brackets only — state taxes are not included.
• Models a single year's conversion. A multi-year planner is being corrected and is not shown.
• Does not account for the Roth 5-year rule on converted amounts.
• IRMAA warning uses current thresholds — these adjust annually.
• Does not model Required Minimum Distributions (RMDs) that begin at age 73 (75 if born in 1960 or later).
• Retirement tax rate is a user estimate — actual future rates depend on legislation and income sources.

Last Updated

April 2026 — Methodology published.

October 2026 — Brackets and standard deduction moved to 2026 (Rev. Proc. 2025-32); IRMAA first-tier thresholds are the 2026 CMS figures ($109,000 / $218,000).