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The Roth IRA Converter Calculator shows you vividly and dynamically whether it is worth converting your traditional IRA to a Roth IRA. The calculator takes into account if you pay your conversion taxes out of IRA proceeds or if you pull them from other sources. It uses 5 input variables: Years until Retirement, IRA Conversion Amount, Annual Yield, Current Tax Bracket and Retirement Tax Bracket. The results are shown as a traditional deductible IRA, conversion to a Roth IRA paying taxes out of the IRA distributions and conversion to a Roth IRA paying taxes out of funds outside of the IRA distributions.
| Investment Amount | |
Slide this diamond to reflect the one-time, lump-sum amount your want to convert.
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For example, you may want to know, 'If I can convert more money now, how much sooner will I meet my investment goal?' |
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Or, 'How much more do I need to convert up front to offset a possible 1-point loss in my annual yield?' |
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| Annual Yield | |
Slide this diamond to the annual yield you would expect to get on your investment until you begin withdrawing from it.
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For example, you may want to know, 'How much more money will I be able to withdraw if I can get just one more point in interest?' |
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Or, 'Is it better to get one more point in interest, or to drop to the next lower tax bracket?' |
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Or, 'How much sooner will I be able to meet my investment goal if I can get one more point in interest?' |
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| Current Tax Bracket | |
Click on the appropriate radio button to tell the calculator your current tax bracket.
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For example, you may want to know, 'How much less money will I be able to withdraw from a my account if my tax bracket goes up a notch?' |
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Or, 'What happens if my current tax bracket changes, but my retirement tax bracket stays the same?' |
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Note: If you peg your tax bracket the same for both the current and the retirement brackets, there is no difference between a traditional IRA and a Roth conversion IRA paying taxes out of IRA distributions.. |
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| Retirement Tax Bracket | |
Click on the appropriate radio button to tell the calculator the tax bracket. You expect to be in at retirement. (Note: traditional wisdom says your retirement tax bracket will be lower than your current one. Beware: this may not be the case if your retirement investments do well.)
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For example, you may want to know, 'How much more money will I be able to withdraw from a my account if my retirement tax bracket goes up a notch and I do a Roth IRA conversion, paying taxes from funds other than my IRA distributions?' |
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Or, 'What happens if my retirement investments do really well and I bump up to the top tax bracket?' |
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Or, 'What happens if my investments do poorly and I wind up making so little that I drop to the bottom tax bracket in retirement?' |
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| Years until Retirement | |
Slide this diamond to the year (from now) at which you will retire and begin withdrawing your money. As you drag the diamond, the current value of your investment reads out in the graph in 3 separate numbers.
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For example, you may want to know, 'What will my investment be worth if I begin to withdraw funds in 20 years?' |
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Or, 'How much more will be in my investment account in 25 years if I invest in a traditional IRA versus a Roth IRA?' |
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Or, 'I need $500,000. When will I have that much money in my account?' |
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