Should I convert to a Roth IRA?

If your expect your adjusted gross income (AGI) to be $100,000 or less and you and your spouse do not file separate income tax returns, you may be eligible to convert your Traditional IRA to a Roth IRA. The decision to convert may rest on whether you are willing to pay the taxes now in return for potentially receiving more after-tax income when you withdraw money from the IRA later.

Please note that beginning in 2010 the $100,000 adjusted gross income limit for conversions to Roth IRAs is permanently repealed. From 2010 onward, all taxpayers, regardless of income, can convert to Roth IRAs. Also, for conversions occurring in 2010, the taxpayer will only have to report one-half of taxable income in 2011 and one-half in 2012. After 2010, conversions must be reported in full in the taxable year in which they are made.

This calculator is designed to help you estimate what your Traditional IRA might be worth if you convert to a Roth IRA and pay the taxes due on conversion from your personal assets.

Assumptions

Current age (1 to 120)

Age when income should start (1 to 120)

Number of years to receive income (1 to 30)

Before-tax return on savings (accumulation phase) (-12% to 12%)

Before-tax return on savings (distribution phase) (-12% to 12%)

Income tax bracket (accumulation phase) (0% to 75%)

Income tax bracket (distribution phase) (0% to 75%)

Current IRA balance ($)

Non-Deductible portion of IRA balance ($)

How will you pay the conversion tax?
1) Pay taxes from non-IRA assets
2) Pay taxes from proceeds of Roth conversionOption 1Option 2

---

Submit