Roth Conversion Calculator

Our Roth IRA Conversion Calculator will give you a starting point for an informed conversation about your financial goals and will help you:

• Compare the estimated future value of your unconverted Traditional IRA with the estimated value of your converted Roth IRA funds.
• Estimate the amount of income tax you would owe at the time of conversion, based on the amount you want to convert.
• Review the potential impact of conversion on your current tax rate.

The decision to convert your Traditional IRA to a Roth IRA is a complicated decision that involves the analysis of many different factors and requires the account owner to make certain assumptions about the future. The above calculation is one of many factors to take into consideration when considering a conversion. This computation assumes that any tax liability resulting from the Roth conversion is paid in a single lump sum in the year following the conversion, and that the taxes are paid from an outside “taxable” account. The estimated future value of the Roth IRA has been "penalized" to reflect the opportunity cost of investing: the growth of funds used to pay the tax resulting from the conversion in this taxable account. The calculator assumes the money is withdrawn in one distribution and shows an after-tax calculation, providing a better comparison. It assumes no further contributions to your existing IRA. It assumes that the funds are held in your Roth IRA for the five-year holding period, and that the distributions are made when you are 59½ or older, in order to avoid additional taxes and penalties.

Schwab is not responsible for the accuracy or completeness of the information you provide, including what you selected as your projected rate of return. The return choices for six model portfolios are based on Schwab’s long-term capital market expectations. These six portfolios span a wide range of risk levels. While future long-term returns are likely to be different than the model portfolios’ historical performance, the average annual return, best year, and worst returns, along with the portfolio description, are provided to assist you in your selection. Please check your records carefully before entering information into the calculator, and keep in mind that these calculations are estimates only. Schwab is not able to provide tax advice or recommendations on actions a client should take regarding their particular situation.

The tax information in the calculator is not intended as a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends you consult with a qualified tax advisor, CPA, financial planner, or investment manager before taking any action.

The results provided by this tool are for informational purposes only and are not intended to provide you with the only specific, actionable information you need to make a decision regarding your account. Schwab makes this tool available to you as a convenience, and results are based on information you provided. Schwab provides information, such as federal tax rates and contribution limits, from third-party sources as a convenience for you, but you should be aware that the rules and restrictions regarding taxes and retirement plans are subject to change without notice. You should confirm the accuracy of the information that Schwab has provided before taking any action. Schwab cannot guarantee the accuracy of such information.