Roth conversion calculator for freelancers

Pay tax now at a lower rate, or later at a higher one. The calculator picks the winner.

A Roth conversion moves pre-tax retirement savings into a Roth account. The money gets taxed today, but grows and withdraws tax-free. Whether that trade is worth it depends almost entirely on one comparison: your current tax rate versus the tax rate you expect to pay in retirement.

Enter your conversion amount, your current and expected retirement tax rates, and your age range. The calculator shows the conversion tax, the after-tax retirement balance under each scenario, and the break-even rate that flips the answer.

What a Roth conversion actually is

A Roth conversion moves money from a pre-tax account — a traditional IRA, a SEP IRA, or a traditional Solo 401(k) — into a Roth account. The money you move is treated as taxable income in the year of the conversion, but every dollar thereafter grows tax-free and can be withdrawn tax-free in retirement, provided the account has been open for five years and you are at least 59½.

The decision therefore comes down to a single comparison: the tax you pay on the conversion now versus the tax you would pay on the same money when you withdraw it in retirement. If the rate you lock in today is lower than the rate you would pay later, the conversion is mathematically advantageous. If it is higher, it is not.

That sounds simple, and it is — for the slice of the problem it actually addresses. The reason people get stuck is that the relevant numbers are uncertain, and the consequences of being wrong are expensive.

The five-year rule nobody reads

A converted amount is immediately available, but withdrawals of converted principal before age 59½ are penalty-free only if the conversion happened more than five years ago. This is the Roth conversion five-year rule, and it is separate from the five-year rule that applies to Roth contributions.

For most people this is a non-issue because they are well past 59½ by the time they need the money. It matters most for people who are converting close to retirement age and want to use the converted money as a bridge before Social Security begins. If you are in that situation, you need to map out which conversions happened when so you know exactly which dollars are accessible penalty-free in any given year.

Which bucket should you convert from?

A traditional IRA, a SEP IRA, and a traditional Solo 401(k) are all pre-tax accounts. The tax on a conversion is the same regardless of which one the money comes from — but the pro-rata rule can make a difference if you have a mix of pre-tax and after-tax IRAs.

If you have a traditional IRA that contains only pre-tax money, converting it is straightforward: the entire amount is taxable, and that is all there is to it. If you have after-tax basis in any of your traditional IRAs — money you contributed to a non-deductible traditional IRA — then every conversion you do is treated as coming proportionally from the pre-tax and after-tax portions across all your traditional IRAs. This is the pro-rata rule, and it is the single most common source of surprise in Roth conversion planning.

If you have a Solo 401(k) with pre-tax money, that money is not subject to the pro-rata rule. Converting from a Solo 401(k) instead of from a traditional IRA can therefore be a meaningful optimization for self-employed people who have both.

When conversions are most useful

A Roth conversion is most valuable when you have a year of unusually low income — a lean year, a year between clients, a year you chose to work less. Your marginal tax rate drops, the conversion tax bill is smaller, and you fill up the bracket below the next one without spilling into it.

Conversely, a conversion during a high-income year is usually a bad idea unless you are certain your retirement tax rate will be even higher. The worst case is converting in a peak year and then retiring in a state with no income tax — you paid a high rate to save a low one, and you lost money on the spread.

Another strong use case is required minimum distributions. Once you reach age 73 (or 75 under the SECURE 2.0 Act, depending on your birth year), you must take RMDs from traditional accounts. Those RMDs push your taxable income up every year and can make Social Security benefits taxable, increase your Medicare premiums, and erode other deductions. Converting some of that balance to Roth each year before RMDs begin can keep your taxable income lower and reduce the long-term drag of required withdrawals.

How much to convert, and how often

There is no universal rule, but the most common strategy is a partial conversion sized to fill a single tax bracket. You estimate your other income for the year, find the top of your current bracket, and convert just enough to land at the bracket ceiling. Repeat every year until the conversion is complete, or until you decide to stop.

This is disciplined, predictable, and easy to model. It is also not the only way to do it. Some people convert a fixed percentage of their pre-tax balance each year. Others wait for a specific low-income year and convert a larger amount in a single pass. The best approach depends entirely on your income volatility, which is exactly the kind of problem that makes spreadsheets and calculators more useful than rules of thumb.

What this calculator does not model

This tool compares the after-tax outcome of converting a single lump sum against keeping it in a traditional account. It assumes a flat current tax rate and a flat expected retirement tax rate. It does not model the pro-rata rule, state taxes, the interaction with Social Security taxation, Medicare IRMAA brackets, changes in tax law, or the RMD implications of converting only part of your balance. Those are real factors, and for a meaningful conversion plan you should run the numbers through a proper tax professional rather than relying on a single-year comparison.