Roth Conversions:
Should You Convert — and How Should You Pay?

Free calculator: enter your numbers, see your projected RMD bracket, and get a clear answer on whether to convert from a brokerage account or the IRA itself.

Assumes 3.5% real return (inflation-adjusted) · 2026 federal tax brackets · No pre-RMD withdrawals
Your Bracket Today
22%
→
Your RMD Bracket at 73
22%
With $2,500,000 at 73 (growing to ~$3.2M), first-year RMD ~$122,000
Pay conversion tax from brokerage
✓ Convert
Break-even rate: 18.7%
Clear win — the full conversion grows tax-free in Roth.
Pay conversion tax from the IRA itself
✓ Also works
Break-even rate: 28.2%
The bracket gap is large enough to offset the lost compounding.

Federal brackets only. State taxes can shift the math significantly.

Knowing whether to convert is the first step. The harder question is how much to convert each year — the right amount depends on your income, tax brackets, healthcare costs, and time horizon, and it changes year by year.

Get Your Optimized Conversion Plan

How much to convert each year, which bracket to fill, and when to pause — modeled against your actual numbers.

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Run multiple strategies, compare ending balance
Convert to the 12% ceiling, 22%, 24%, or not at all — the strategy with the highest tax-adjusted ending balance wins.
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Factor in healthcare costs
Conversions spike MAGI — costing $10–15K/yr in lost ACA subsidies before 65, or IRMAA surcharges on Medicare after. The right ceiling changes year by year.
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Account for tax-free compounding
$1 in Roth is worth $1 at withdrawal. $1 in Traditional is worth ~$0.68–0.76. A higher bracket can still win if extra dollars compound tax-free for decades.
Book Your Optimization Session

Run your own projections or work with us to find your optimal ceiling.

Assumptions & Methodology

  • Growth rate: 3.5% real (inflation-adjusted) annual return applied to Traditional IRA balance
  • RMD calculations use the IRS Uniform Lifetime Table (starting age 73)
  • Tax brackets based on 2026 federal rates; state taxes not included in this simplified calculator
  • RMD tax bracket estimate stacks RMD income on top of your annual income (which should include Social Security)
  • This is educational content, not financial advice. Your actual savings depend on state taxes, investment returns, and other factors. Consult a tax professional for your specific situation.

What is Break-Even Tax Rate (BETR)?

Your break-even rate is the future tax rate above which converting to Roth today saves you money. If your projected RMD bracket exceeds your BETR, conversion is a net win.

Why the two rates differ: When you pay the conversion tax from a brokerage account, the full converted amount grows tax-free in Roth, and the brokerage money would have faced annual tax drag on dividends and capital gains anyway. This makes the break-even rate lower than your current bracket — conversion can win even if your future bracket is slightly below your current one.

When you pay from the IRA itself, part of your conversion goes to taxes instead of growing tax-free. You need a larger bracket gap to make up for that lost compounding, so the break-even rate is higher than your current bracket.