Make a move today that your future self will thank you for.
If you’re a retiree or approaching retirement, you’ve likely seen markets pull back before. And you’ve probably learned that when volatility spikes, the urge to sit still or make a rash move gets loud.
But some of the best long-term decisions happen when things feel uncertain. And one of the smartest, most overlooked strategies available right now is a Roth conversion.
What’s a Roth Conversion and Why It Matters
A traditional IRA is tax-deferred, meaning you don’t pay taxes while the money grows. You pay when you take it out. A Roth IRA works in reverse. You pay taxes up front, but everything after that grows and can be withdrawn tax-free in retirement.
A Roth conversion moves money from a traditional IRA into a Roth. Yes, you’ll owe income tax on the amount you convert. But from that point forward, the growth and withdrawals are potentially tax-free for life, subject to IRS rules and individual circumstances. However, it’s important to consider that market conditions can affect the actual growth of investments
This also matters because of Required Minimum Distributions (RMDs). Starting at age 73, the IRS requires you to withdraw from traditional IRAs, whether you need the money or not. Roth IRAs don’t have RMDs during your lifetime, which gives you more control over your future income and tax bracket. And because of this, they’re also a powerful legacy planning tool, offering tax-free assets that can be passed to heirs more efficiently.
Volatility Can Be a Window of Opportunity
When markets drop, it’s easy to get defensive. But that’s often when opportunity quietly shows up.
A down market means the value of your investments is temporarily lower. You can convert more shares for the same tax hit. If those shares rebound inside a Roth, that entire recovery is yours, tax-free.
Let’s make that real. In March 2020, the S&P 500 dropped more than 30 percent. SPY, the ETF that tracks it, fell to around $220 per share. If you had hypothetically converted $50,000 of SPY at that moment, you would have received about 227 shares. By the end of 2021, SPY rebounded to over $470. Those same shares could have been worth nearly $107,000, with every penny of growth potentially shielded from future taxes inside the Roth. Please note, this is a hypothetical example and past performance is not indicative of future results.
You would’ve paid tax on the $50,000 conversion, not the $57,000 of growth. That’s what it means to turn volatility into long-term advantage.
Why This Works Best in Retirement’s “Low-Income Window”
Many retirees face a 5 to 7 year stretch between retirement and when Social Security, pension income, or RMDs begin. This window can be a golden opportunity. Lower income means more room to convert assets at lower tax brackets.
It’s not about market timing. It’s about aligning your tax strategy with your income reality and using temporary volatility to your advantage. With current tax rates scheduled to increase in 2026, this window may be narrowing.
This Isn’t Reactive. It’s Intentional.
When uncertainty is high, the question “Should I be doing something?” is common. But not every action has to be loud or reactive. Some of the best decisions in retirement planning are quiet and strategic.
A Roth conversion isn’t a bet. It’s a shift. From taxable to tax-free. From forced distributions to financial flexibility. From potential tax burdens to long-term clarity.
Closing Thought
Roth conversions aren’t flashy, but they’re one of the most powerful long-term tools available to retirees. Especially when markets are unsettled and income is temporarily low, this kind of planning can quietly shift your financial future in the right direction.
It’s not about trying to guess the bottom. It’s about using the moment well.
If that window applies to you, it’s worth exploring.
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