The last six weeks have been a stark reminder to investors that stocks do, on occasion, go down in price. Both the S&P 500 and Nasdaq Composite indexes fell more than 10% from their all-time highs from mid-February to mid-March, marking an official correction.

Continued economic uncertainty and a lack of clarity around U.S. trade policies mean markets remain relatively volatile at this point. Many fear stocks could continue to decline until there’s a better picture of where things stand.

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For most retirees, it might feel like there’s nothing they can do amid a market sell-off. After spending years accumulating assets, they’re now at the whims of the market. There’s no ability to buy on the dip. Without fresh capital to deploy, they can’t scout for new stock opportunities and are merely hanging on for the ride.

But savvy retirees can still take advantage of a stock market sell-off. Here’s how.

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Your future self will thank you later

If you want to take advantage of temporarily lower prices for the stocks you hold in your retirement account, you can perform a Roth conversion. Once assets are in the Roth, they’ll typically grow on a tax-free basis.

To execute a Roth conversion, you’ll transfer assets from a pretax retirement account like a traditional IRA or 401(k) to a Roth IRA. You’ll have to pay income taxes on any amount you choose to convert. Importantly, though, that amount is based on the exact value at the time of conversion.

So, when stock prices go down, you can convert the same number of shares as before, but incur a lower tax bill at the end of the year. You’ll potentially save hundreds or thousands of dollars by strategically converting portions of your retirement account when stocks decline in value.

Consider those in the 22% tax bracket. If they convert $10,000 worth of stocks in their IRA to a Roth IRA, they’ll owe $2,200 in taxes next April. However, if they wait for a 10% pullback in stock prices, they could convert the same number of shares for only $9,000 worth of income, resulting in a tax bill of $1,980, a savings of $220. And again, if the market rebounds, the subsequent gains would be tax-free inside the Roth.

Note that you usually don’t have to sell your securities to do a Roth conversion. You can transfer your assets “in kind,” which means you won’t have to risk leaving your retirement savings uninvested.

That’s especially important in volatile markets where you could miss out on a big day of gains if you’re waiting for cash to transfer so you can reinvest it.

It comes with an added benefit

On top of saving money on taxes, Roth conversions during a down market are a great way to reduce your future required minimum distributions, or RMDs. Required minimum distributions apply to pretax retirement accounts currently starting the year you turn 73. Anyone born in 1960 or later will be able to wait until age 75 before they have to start taking RMDs.

If your RMD is more than you need for your normal spending in retirement, it can be a huge burden. That’s because you have to pay taxes on the amount you withdraw from your pretax retirement accounts. The bigger your RMD, the bigger your tax bill.

While Roth conversions won’t count toward your RMD, they can reduce them in the future. That’s because your required distribution is based on the balance in your account at the end of the previous year. The more you’re able to convert from your traditional retirement accounts to a Roth, the less you’ll have subject to required minimum distributions for the following years. Roth accounts typically aren’t subject to RMDs.

The tax savings from a lower RMD could be even greater than the tax savings from taking opportunistic Roth conversions. That’s because taxes can get much more complex in your 70s with the combination of retirement account withdrawals, Social Security income, and capital gains from taxable brokerage accounts. The more you have in a Roth account by the time you reach that point, the easier tax planning becomes.

So, if you’re just sitting around watching your retirement savings dwindle as stocks decline in value, you’re missing out on a stellar opportunity. Now’s a great time to perform a Roth conversion.

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