Traditional 401(k) to Roth 401(k) Conversion Tax Calculator

Convert your traditional 401(k) to a Roth 401(k) tax-free*!

Calculate your potential tax savings today using our exclusive converter.

Step 1: Enter your pre-tax traditional 401(k) balance: $##,###

Step 2: Enter your estimated annual income: $##,###

Step 3: Enter your tax bracket: ##%

*If your income exceeds certain limits, you may not be eligible for a full tax-free conversion.

Estimated tax savings: $##,### (##%)

Why Convert to a Roth 401(k)?

• Tax-free growth: Contributions made after conversion grow tax-free, unlike traditional 401(k)s where taxes are deferred until withdrawal.
• No Required Minimum Distributions (RMDs): Withdrawals from Roth 401(k)s are not subject to RMDs, allowing you to keep your money invested for longer.
• Flexibility in retirement: Roth 401(k)s offer more flexibility than traditional 401(k)s, allowing withdrawals for qualified expenses without tax penalties.

Key Considerations

• Tax consequences: A conversion from a traditional 401(k) to a Roth 401(k) is considered a taxable event. The amount converted is taxed as income in the year of conversion.
• Income limits: Conversions are subject to income limits. Consult with a financial advisor or tax professional to determine your eligibility.
• Age restrictions: Individuals must be at least 59½ years old to make a tax-free Roth 401(k) conversion.

Step-by-Step Guide to Converting

1. Choose an eligible plan: Not all 401(k) plans allow conversions to Roth 401(k)s. Check with your employer or plan administrator.
2. Estimate your tax liability: Use our calculator or consult a tax professional to estimate the taxes you will pay on the conversion amount.
3. Initiate the conversion: Contact your plan administrator and provide the conversion request.
4. Pay the taxes: The taxes on the conversion must be paid with after-tax dollars.
5. Manage your Roth 401(k): Once the conversion is complete, the money will be invested in your Roth 401(k). Monitor your account balance and make adjustments as needed.

FAQs

1. What happens to the money I convert to a Roth 401(k)?
The converted amount is invested in your Roth 401(k) account and grows tax-free.

2. Can I convert back to a traditional 401(k)?
Once you convert to a Roth 401(k), you cannot convert back to a traditional 401(k).

3. How often can I convert?
Conversions can be made as often as desired, but each conversion is considered a taxable event.

4. What is the "qualified expense" exception to Roth 401(k) withdrawals?
Roth 401(k) withdrawals are tax-free and penalty-free if they are made for qualified expenses, such as first-time home purchases, higher education, or medical expenses.

Act Now to Secure Your Financial Future!

Convert your traditional 401(k) to a Roth 401(k) today using our exclusive calculator and start saving for a tax-free retirement.

Disclaimer:

Please note that this calculator is for informational purposes only and should not be construed as professional financial advice. Consult with a qualified financial advisor or tax professional for personalized guidance.