Impact to existing data by changing a field from a radio button selection to a formula?

If you change your data entry to a formula field then you will lose the historical data entry information.  

I suggest you do is to maybe rename that field to suffix it with the word (phase out), and then use a Forum rule to hide that field unless it is already populated. Then you could have your formula field take into account if that field had a value in which case to use it else continue on with the formula field.