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Roth Conversion After Tax Value Estimator

This estimator compares the future after-tax value of converting a traditional IRA amount to a Roth IRA today with leaving the same amount in a traditional IRA. The model assumes conversion tax is paid from money outside the retirement account, then treats the future value of that tax payment as an opportunity cost.

IRS guidance states that untaxed amounts converted from a traditional IRA to a Roth IRA are generally included in gross income for the conversion year, while qualified Roth IRA distributions can be tax-free. This calculator lets you supply both the conversion-year tax rate and the future traditional-IRA withdrawal tax rate so the trade-off is visible.

Calculator inputs

$
%
%
%
years
Result
—
Net Roth value after tax-payment opportunity cost
Roth future value—
Future value of conversion-tax cost—
Traditional IRA after-tax value—

1. Enter the conversion amount
Use the pretax traditional IRA amount you are considering converting.

2. Set the conversion-year tax rate
Use the marginal tax rate you want to apply to the taxable conversion amount in this scenario.

3. Estimate the future withdrawal tax rate
This rate is applied to the future traditional IRA balance for comparison.

4. Choose return and holding period
The same retirement-account return is applied to both strategies.

5. Compare net Roth and traditional values
The main result subtracts the future opportunity cost of taxes paid from outside funds; the breakdown shows the traditional after-tax comparator.

Roth future value = Conversion × (1 + return)^years; Tax opportunity cost = (Conversion × Current tax rate) × (1 + return)^years; Net Roth value = Roth future value − Tax opportunity cost; Traditional after-tax = Conversion × (1 + return)^years × (1 − Future tax rate)

This assumes taxes are paid from outside the retirement account and that the outside tax dollars would otherwise earn the same stated return.

What the result means

The main result is the Roth future value net of the modeled opportunity cost of paying conversion tax today.

Actual Roth conversion taxation can depend on basis, aggregation/pro-rata rules, other income, and account type; qualified-distribution requirements also matter.

Given: convert $60,000, current tax rate 22%, future withdrawal rate 25%, return 6%, 12 years.

Calculation: Growth factor = 1.06¹² ≈ 2.0122. Roth future value ≈ $120,732. Conversion tax = $13,200; its future opportunity cost ≈ $26,561. Net Roth value ≈ $94,171. Traditional after-tax value ≈ $90,549.

Result: In this simplified scenario, the net Roth value is about $3,622 higher.

Why assume the conversion tax is paid from outside the IRA?

Paying tax from outside funds keeps the full converted amount invested in the Roth. If tax is withheld from the IRA, both the invested amount and possible distribution-tax consequences can differ.

Is every dollar converted taxable?

Not always. IRS guidance notes that untaxed traditional IRA amounts are generally taxable on conversion, while basis can affect the taxable portion. This estimator expects you to choose a rate and amount consistent with your scenario.

Why subtract an opportunity cost for the tax payment?

Money used to pay conversion tax cannot remain invested elsewhere. Growing that amount at the same assumed return makes the comparison more economically complete.

Does a Roth IRA always come out ahead when the future tax rate is higher?

Under these simplified assumptions, a higher future traditional-IRA tax rate favors conversion, but actual outcomes also depend on returns, tax funding, timing, and tax rules.

Are Roth withdrawals always tax-free?

Qualified Roth IRA distributions can be tax-free, but eligibility requirements apply. The estimator assumes the Roth value is ultimately available tax-free for the modeled comparison.