Roth Conversion at 18 Calculator

At 18, a Trump Account becomes a traditional IRA — and you can convert it to a Roth IRA. The catch is the tax bill: everything except your family's after-tax contributions is taxed as ordinary income in the year you convert. This calculator compares converting at 18 against leaving the money traditional, projected to age 65.

Tip: run our homepage calculator first — $1,000 seed + $5,000/yr at 7% gives $185,275 at 18.
Only family/friend deposits count as basis. The $1,000 pilot, employer money and all earnings do not.
Converting in a low-income year (e.g. a college year) can mean a much lower rate.
For illustration only — actual returns vary and are never guaranteed.
Tax due on conversion at 18
$0

At age 65ValueHow it works
Roth IRA — tax paid from outside funds$0Full balance converts and grows tax-free; withdrawals in retirement are tax-free.
Roth IRA — tax paid from the account$0Balance minus the tax bill converts; the smaller Roth still grows tax-free.
Left traditional — after tax at withdrawal$0Balance grows, then tax at your retirement rate applies to everything except basis ($0 of tax).

Taxable at conversion: $0 (balance minus basis). A conversion is not a cash withdrawal, so the 10% §72(t) early-distribution tax does not apply to the converted amount itself — only ordinary income tax on the taxable portion.

Projections are estimates based on the return you choose; they are not a guarantee and this site is not financial advice. Program rules follow IRS and Treasury guidance and may change.

How the conversion works

From January 1 of the year the child turns 18, the Trump Account is generally treated as a traditional IRA — see what happens at 18. A traditional IRA can be converted to a Roth IRA at any time, in any amount. The mechanics are simple, but the tax split is where families get surprised:

  • Taxed as ordinary income: the $1,000 pilot deposit, all employer (§128) contributions, all qualified general contributions, and all investment earnings. None of these create basis.
  • Not taxed: basis — the family's own after-tax contributions during childhood. That money was already taxed when it went in, so it comes back tax-free, whether converted or withdrawn.
  • No 10% penalty on the conversion itself. The §72(t) additional tax applies to early cash distributions, not to a conversion. (Cash withdrawals before 59½ are a different story — see our withdrawal rules guide.)
  • No earned income needed, no income limit. Conversions — unlike Roth contributions — do not require compensation. That is exactly why the college years matter: a student with little income can convert at a low bracket.

The real decision: rate now vs. rate later — plus basis

The textbook rule says: convert when your rate now is lower than your rate later, don't when it is higher. That rule is almost right, and the exception is basis. Growth on the basis portion is tax-free inside a Roth but taxable inside a traditional IRA — so a large basis can make conversion win even when today's rate is higher. Try it in the calculator: $100,000 at 18 with $40,000 of basis, converting at 32% against a 22% retirement rate, still comes out ahead, because the tax-free growth on that $40,000 outweighs the rate penalty. With zero basis, the textbook rule holds exactly. The honest way to decide is to run your own numbers — that is what the calculator above is for.

Two practical moves that beat "convert everything at 18"

First, convert in slices. Partial conversions across several years are allowed. Converting a slice each low-income year keeps each year's conversion inside a lower bracket, instead of one big conversion spiking into a higher bracket. Second, pay the tax from outside funds when you can. Paying from the account shrinks the Roth by the tax bill, and that smaller balance compounds for 47 years to 65. The calculator shows both lines so you can see the gap — but remember the outside-funds line is not free money: those dollars could otherwise have been invested elsewhere.

One more caution: a conversion raises your taxable income in the conversion year, which can affect financial aid, credits, and bracket placement. If the numbers are close, or the balance is large, confirm the plan with a tax professional before converting — this page is education, not advice.

Frequently asked questions

Can a Trump Account be converted to a Roth IRA at 18?

Yes. From January 1 of the year the child turns 18, the account is generally treated as a traditional IRA, and traditional IRAs can be converted to Roth IRAs. The converted amount is taxed as ordinary income in the conversion year, except the basis portion.

What part of the conversion is taxed?

Everything except basis. Basis is the family's own after-tax contributions during childhood. The $1,000 pilot deposit, employer contributions and all investment earnings create no basis, so they are taxed as ordinary income when converted.

Does the 10% early-distribution tax apply to a Roth conversion?

No. A conversion is not a cash withdrawal for spending, so the 10% additional tax on early distributions does not apply to the converted amount itself. Ordinary income tax on the taxable portion still applies.

Do I need earned income to convert?

No. Conversions need no earned income and have no income limit — unlike Roth contributions, which do require compensation. That is why converting in a low-income year, such as a college year with little earnings, can be powerful.

Should I pay the conversion tax from the account or from outside funds?

From outside funds if you can. Paying from the account shrinks the Roth by the tax bill, and that smaller balance compounds for decades. Paying from outside leaves the full balance growing tax-free — though those outside dollars could otherwise have been invested elsewhere, so the comparison is not free money.

Can I convert only part of the account?

Yes. Partial conversions across several years are allowed, and they are the main planning tool: convert a slice each low-income year to stay in a lower tax bracket, instead of converting everything in one high-tax year.

Sources

Rules verified against IRS and Treasury sources — last updated October 24, 2026.

Projections are estimates based on the return you choose; they are not a guarantee and this site is not financial advice. Program rules follow IRS and Treasury guidance and may change.