Guide
Roth conversion planning.
A Roth conversion moves money from a traditional retirement account into a Roth account. The tradeoff is paying tax now for different tax treatment later.
Conversions can be useful in years when taxable income is unusually low, such as the gap between leaving work and starting Social Security or required retirement withdrawals. But a conversion can also raise taxes, affect credits, or interact with healthcare subsidies.
Good conversion planning starts with a multi-year tax view, not a single-year guess. The right amount may be zero, a small partial conversion, or a larger conversion depending on household income, deductions, future withdrawals, and estate goals.
The calculator does not model taxes directly. Use it to estimate retirement timing and portfolio pressure, then evaluate tax strategy separately with current tax rules and professional help where needed.
Potential benefit
A planned conversion may reduce future taxable traditional-account balances and create more Roth assets for later withdrawals.
Potential cost
The conversion amount can increase taxable income in the conversion year, so the cash to pay taxes matters.
Planning questions
- Will income drop after retirement but before Social Security?
- Will future required withdrawals push taxable income higher?
- Can taxes be paid from outside the converted account?
- Could a conversion affect healthcare subsidies or Medicare premiums?