What is the advantage of transferring to a Roth IRA?
In 1997, the Roth IRA was introduced. Since then, many people have converted all or a portion of their existing Traditional IRAs to a Roth IRAs, where interest earned may be completely tax-free. Is this a good option for you? A conversion has both advantages and disadvantages that should be carefully considered before you make a decision. This calculator estimates the change in total net-worth, at retirement, if you transfer your Traditional IRA into a Roth IRA.
|Amount to transfer:||Amount to transfer from a Traditional IRA account to a ROTH IRA. It is important to note that some high income households do not qualifiy for a Roth IRA conversion. Currently, anyone with an adjusted gross income over $100,000 cannot make a Roth IRA conversion. For the purposes of this calculator, we assume that your income does not limit your ability to convert to a Roth IRA.|
|Non-deductible contributions:||Amount contributed to the Traditional IRA you are converting that was not tax deductible.|
|Current tax rate:||Current marginal income tax rate.|
|Tax tate at retirement:||Expected marginal income tax rate at retirement.|
|Investment tax rate:||Expected marginal tax rate (base this on expected capital gains rate) for investments.|
|Current age:||Current age.|
|Age at retirement:||Desired age at retirement.|
|Rate of return:||Expected rate of return on your investments.|