As a broker during the tech bubble and subsequent bust, I saw a lot of inexperienced investors. For many, the pain of losses in stocks like Intel (NASDAQ:INTC), Cisco (NASDAQ:CSCO), and (NASDAQ:AMZN) blinded them to a long-term opportunity to cut taxes. Now, it looks like we're in a similar situation again.

Back then, the Roth IRA was still relatively new. Yet even today, investors still struggle with the choice of converting existing IRAs to a Roth.

One former client of mine had about $80,000 in a traditional IRA. That was 2002, though; a mere three years earlier, the account had been worth a lot more.

He liked the idea of tax-free distributions, even though that was still years down the road. What he didn't like was the hefty tax bill from converting -- about $24,000 if he converted to a Roth IRA. To avoid penalties, he would have had to find the money to pay that tax from somewhere else.

That was too much for my client, who decided not to convert at the time. But I keep thinking about the opportunity he missed.

Cost of waiting
For $24,000 up front, he would never have had to pay another cent of taxes on that account, which likely doubled along with the S&P in the bull market that followed. Instead, he'll pay more taxes on a much higher balance when he retires -- and probably at a higher rate as well.

Now in general, deciding to convert is complicated. If my client had invested that $24,000 as well, it also would've grown substantially. But because this client was the sort who had his non-IRA money invested conservatively, I'm sure that $24,000 didn't grow nearly as much as his IRA did.

Another chance
With the recent bear market, conversion is getting cheaper again. As IRA balances drop, the taxes due on conversion fall. If you have cash on the sidelines anyway, converting lets you use your cash to buy tax savings for the rest of your life.

If losing stocks like Fannie Mae (NYSE:FNM) and Toll Brothers (NYSE:TOL) have pulled your IRA balances down, it's worth talking to your accountant about whether a Roth conversion makes sense for you. Although paying taxes sooner than later usually doesn't make sense, the combination of depressed stocks and historically low tax rates may make now an exception to the general rule.