Assumptions

Current age

IRA / 401(k) balance to convert

Investment growth rate (annual %)

Life expectancy (years from now) Death at age 95

Max years IRA/Roth held till distribution 1–10. Currently 10 under the SECURE Act.

Average age of beneficiaries Their age in the first year after death. Sets the IRS Single Life divisor. There may be required RMDs by beneficiaries — see the Beneficiary RMD Calculator for more info.

Current tax rate (%) Paid on the conversion today.

Distribution-account tax rate (%) Capital gains rate (20% long-term + 3.8% NIIT). Nothing is taxed while the money stays invested; the whole gain is taxed when it is withdrawn.

Federal estate tax rate (%) Current top federal rate is 40%.

State estate tax rate (%) Most states have none; those that do top out near 16–20%.

Estate tax exemption Per person, 2026 federal. Roughly double with a spouse's portability. Set to $0 to apply the rates flat.

Will the tax rate stay the same for the rest of the owner's life?

Yes — use the current rate throughout No — a different rate applies later

Will the beneficiaries' tax rate be the same as the owner's?

Yes — whichever rate applies in the year they inherit No — beneficiaries have their own rate

How is the Roth conversion tax paid?

From the converted funds The tax comes out of the IRA, so less lands in the Roth. From outside funds — opportunity cost charged Full amount converts. Those personal assets are then charged against the Roth path as a growing negative, because putting the whole balance in the Roth costs you having that money invested outside it. From outside funds — not counted in the analysis Full amount converts and the outside cash is treated as out of scope: no opportunity cost charged. This flatters the Roth, since a real cost you are incurring is left out.

When do beneficiaries distribute the IRA/Roth funds?

Immediately The whole inherited IRA comes out in the first year after death. Evenly each year across the window Balance ÷ years remaining, so the account empties exactly on schedule — except where that falls below the required minimum, which then takes over. An even split across ten years is short of the minimum for a beneficiary of about 84 or older. Required minimum each year, remainder in the final year Maximum legal deferral. Because the owner died on or after their required beginning date, an annual minimum is compulsory — it is computed from the IRS Single Life table at the average beneficiary age above, with the divisor dropping by 1.0 each year. Whatever is left comes out in the final year.

Traditional path — what pays the estate tax?

The distribution account Assets are sold to settle the bill, leaving the IRA intact to keep compounding tax-deferred. The sale realises a gain, so enough is sold that the proceeds net of capital gains tax cover the bill. The Traditional IRA The IRA is drawn down instead. A withdrawal is ordinary income, so more must come out than the bill itself — the difference is lost to income tax and shown in the income tax column. Whichever source is chosen, the other covers any shortfall.

Roth path — what pays the estate tax?

The Roth itself The Roth balance is reduced at death, so the amount paid stops compounding for the beneficiaries. Other funds The Roth keeps compounding untouched. The money is still spent, so it is charged against the Roth path as outside capital — the same treatment as the conversion tax.

When do the beneficiaries take the distribution account?

Immediately Handed over in full in the first year after death, and stops compounding there. Evenly each year across the window Balance ÷ years remaining; each slice stops compounding once it is out. Left invested to the end of the window Keeps compounding at the after-tax rate for the whole window.

Withdrawals realise the gain built up inside the account, so capital gains tax comes out of each one and only the net reaches the beneficiaries. Anything still invested at the end of the window is liquidated and taxed too, so the headline figure is after all tax. The Roth path's opportunity cost stops compounding on the same schedule, since the assets it stands for would have been handed over at the same time.

Total portfolio value by age — after tax paid to date

Traditional total = IRA + reinvested-RMD side account. Values shown before the beneficiaries' final withdrawal tax.

Traditional path Roth path Death — inheritance clock starts

Year by year

	Traditional path							Roth path
Age	Traditional IRA	Distribution RMD taken	Distribution RMD beneficiaries	Income tax paid	Distribution account	Estate tax	Combined asset value	Roth balance	Estate tax	Opportunity cost before tax	Opportunity cost after estate cost	Combined asset value

Modeling assumptions

Inherited Traditional distributions are ordinary income. Tax is deducted in the year each distribution is taken, at the beneficiary rate, and the net is paid straight to the beneficiaries — it is never reinvested into the distribution account, and it is held as cash from that point on, earning nothing. Inherited Roth distributions are tax-free, so nothing is deducted on that side.
Distribution timing does change the Traditional ending total, though not for the reason you might expect. The income tax on the distribution commutes — taxing before growth and after growth cancel out under a single flat rate — so tax is not what drives the difference. What drives it is that money leaving the IRA is paid straight to the beneficiaries and held as cash from then on, while whatever stays inside the IRA keeps compounding. Taking money out sooner therefore costs the Traditional path real money even with every tax rate set to zero. Note this cuts against the Traditional path structurally, since the inherited Roth is assumed to stay invested to the end of the window. Working the other way, a real lump sum stacks into higher brackets, which spreading avoids — a flat-rate model cannot capture that.
The annual minimum is a floor under every timing option, not one of the choices. This model has the owner dying at 73 or later in most configurations, so the owner died on or after their required beginning date and the beneficiaries must take a minimum in every year of the window but the last — whatever schedule is selected above. Those minimums come from the IRS Single Life Expectancy table at the average beneficiary age, with the divisor reduced by 1.0 each year rather than re-read at the new age. Taking the whole account at once always clears the floor; an even split does not, once the beneficiary's divisor is smaller than the window length (roughly age 84 and up), and the floor then governs. Against a hypothetical no-withdrawal path — which the rules do not permit — obeying the floor costs the Traditional path about $184,000 at the defaults, whichever way the distribution account is handed over, since the minimums are paid to the beneficiaries and never touch that account.
The inherited Roth is assumed to be left invested to the end of the window. That is the optimal choice, so the model does not offer it as a lever: pulling it early would stop it compounding, exactly as it does for Traditional money once distributed. Note the asymmetry this creates — Traditional money is forced out by the annual minimum and freezes as cash, while the Roth compounds untouched for the full ten years. Some of the Roth's advantage in the totals comes from that assumption rather than from tax.
Two IRS tables are used, both current as of August 6, 2026 — subject to change. The owner's RMDs come off the prior year-end balance using the Uniform Lifetime Table (divisors for ages 72–120, held at 2.0 beyond 120). The beneficiaries' minimums use the Single Life Expectancy Table (Table I, ages 0–120+), read once at their age in year one.
The distribution account holds the owner's reinvested RMDs, and nothing is taxed inside it while it stays invested. Growth accrues untaxed and the whole gain is charged at the distribution-account rate only when money is withdrawn. The engine can model an annually-taxed income share instead, but the page sets that share to zero, so annual tax on this account is always $0. Beneficiary distributions never enter it.
Withdrawals are taxed on their gain. Selling realises the accumulated appreciation pro-rata, and capital gains tax comes out of the withdrawal — only the net reaches the beneficiaries. Whatever is still invested at the end of the window is liquidated and taxed too, so the headline figure is after all tax.
"Combined asset value" is the IRA, the distribution account, and everything already handed to the beneficiaries, after every tax actually paid to that year. No future tax is projected into it: each levy — RMD income tax, beneficiaries' income tax, capital gains, estate tax — has already reduced a balance at the moment it was charged, so no further deduction is needed. At the starting age it therefore equals the full balance, because nothing has been paid yet. On the final row everything is liquidated and settled, so it equals the "Beneficiaries receive — Traditional" figure exactly.
The inherited Traditional IRA gets no step-up in basis. It is income in respect of a decedent (IRD), so beneficiaries owe ordinary income tax on the full amount they withdraw. Only the distribution account — an ordinary taxable brokerage account — is eligible for a step-up.
The distribution account gets a step-up in basis at death, per current law (IRC §1014): basis resets to market value, erasing pre-death appreciation. Capital gains tax is still charged on withdrawals, but only on growth after the beneficiaries inherit. This is applied unconditionally — the model does not offer a repeal scenario.
The opportunity cost's foregone growth accrues at the same untaxed rate, since those personal assets would sit in the same kind of deferred account — and it stops compounding on the same schedule the beneficiaries take the distribution account. Without that, handing the distribution account over early would freeze the Traditional side while the Roth's charge kept growing, which would penalise the Roth for a timing choice made on the other path.
The opportunity cost belongs to the Roth path. When the conversion tax is paid from outside funds, putting the full balance into the Roth costs you having those personal assets invested outside it. That is charged against the Roth as a growing negative rather than credited to the Traditional path. Without estate tax the two framings give an identical difference between the paths; the absolute totals differ either way.
The foregone assets are estate-taxed, and the charge is netted down by it. Had you not converted, that outside money would still have been yours and would have sat in your estate. Charging its full pre-estate-tax value against the Roth would overstate what was given up, so the model levies estate tax on it and reduces the charge — shown in the "Opportunity estate tax" column on the death row. It is taxed at the margin on the Traditional estate, because that is the world those assets belong to: stacking it on the Roth estate instead would grant relief for tax the no-conversion path would never have paid. One consequence to keep in mind: the pool is taxed but is still not carried as a Traditional asset, so the Traditional path does not receive what survives that tax.
Estate tax is levied once, at death, on whatever each path still owns — the Traditional IRA plus its side accounts, or the Roth balance. Each path is measured against the same exemption.
You choose what settles the estate tax bill, and the choice costs different amounts. On the Traditional path it comes from the distribution account by default, which leaves the IRA intact to keep compounding; selling realises a gain, so enough is sold that the proceeds net of capital gains tax cover the bill. Funding it from the IRA instead is more expensive: an IRA withdrawal is ordinary income, so more must come out than the bill itself and the difference is lost to income tax, charged at the beneficiary rate and shown in the income tax column on the death row. Whichever source is chosen, the other covers any shortfall. On the Roth path the bill either reduces the Roth — so the amount paid stops compounding — or is settled from other funds, in which case the Roth is left untouched and the money is charged against the Roth path as outside capital, the same treatment as the conversion tax.
State estate tax is deductible against the federal taxable estate (IRC §2058), so the two rates compound rather than add: 40% federal plus 16% state is an effective 49.6%, not 56%.
A Traditional IRA is estate-taxed on its full pre-income-tax value, then income-taxed again as the beneficiaries draw it out. A Roth was already income-taxed at conversion and those dollars have left the estate — which is the estate-tax argument for converting, and why the two paths can diverge here even at a flat income tax rate.
The §691(c) deduction is not modeled. In reality beneficiaries may deduct the federal estate tax attributable to an inherited IRA against their income tax on those distributions. Leaving it out overstates the Traditional path's total tax whenever estate tax is actually due.
One exemption is applied to both paths. Real state exemptions are often far lower than the federal one, so a state rate above 0% understates the tax where that is true.
The final-year payout is not counted as an RMD. Emptying the account by the end of year ten is the plan terminating, not a required minimum, so it is excluded from the "Distribution RMD beneficiaries" column and its total — that column carries only the compulsory annual minimums. The payout itself is still visible on that row: the Traditional IRA balance beside it is the amount being liquidated, the row is tagged "full distribution", and the tooltip reports the whole distribution including the sweep.
The table has two footer rows, and they mean different things. "Final" is a running summary: some of its cells are cumulative flows — every RMD the owner ever took, every distribution the beneficiaries ever took — which are already reflected in the balances and therefore do not add into the result. "Net" strips those out and shows only the pieces that compose the combined figure, so that row genuinely adds across: the IRA remainder after its settlement tax, plus IRA money already handed over, plus the distribution account net of its gains tax; and on the Roth side, the balance less the opportunity charge.
Rows shaded orange are after death, during the beneficiaries' distribution period.

Results

Roth advantage

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Beneficiaries receive — Traditional

—

after final withdrawal tax

Beneficiaries receive — Roth

—

tax-free to beneficiaries

Beneficiaries' ordinary income tax

—

Estate tax at death

—

Total tax paid — Traditional

—

RMD taxes + beneficiaries' final tax

Total tax paid — Roth

—

one-time conversion tax

Conclusion

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Roth conversion vs. staying Traditional

Assumptions

Year by year

Results

Conclusion

What is driving this result

What would change the answer