What is a Roth Conversion?

A Roth conversion is the process of moving funds from a traditional IRA or 401(k) to a Roth IRA. You pay taxes on the converted amount now, but future growth and withdrawals are tax-free.

When should I do a Roth Conversion?

The best time to do a Roth conversion is during early retirement or other low-income years when your marginal tax rate is significantly lower than what you expect it to be in the future (e.g., when RMDs begin).

Is there a penalty for a Roth Conversion?

No, there is no early withdrawal penalty for a Roth conversion itself. However, you must wait 5 years before withdrawing the converted principal penalty-free if you are under 59.5.

Roth Conversion Calculator

Find the sweet spot for your annual Roth conversions.

Conversion Optimizer

This tool helps you estimate the optimal amount to convert to a Roth IRA to fill up a specific tax bracket without spilling into the next one.

Current Taxable Income (Before Conversion)

Target Tax Bracket to Fill (Single Filer - 2024)

How Roth Conversions Work

A Roth conversion involves taking money from a pre-tax account (like a Traditional IRA) and moving it to an after-tax account (Roth IRA). You pay ordinary income tax on the amount converted in the year you do it.

This strategy is highly effective as part of an overall Tax Optimization FIRE strategy. By converting funds during low-income years (like early retirement), you lock in a low tax rate and allow the money to grow tax-free forever.

The Roth Conversion Ladder

For early retirees, the Roth Conversion Ladder is a vital strategy. You convert a specific amount each year. After five years, that converted "principal" can be withdrawn penalty-free, even if you are under 59.5. This provides a steady stream of tax-free income.

Roth Conversion Calculator

Conversion Optimizer

Optimal Conversion Amount: $0

How Roth Conversions Work

The Roth Conversion Ladder

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