By Beth Pinsker
NEW YORK (Reuters) - Spoiler alert: None of the useful things you can do about your money right now involve your 401(k).
Financial advisers tend to caution long-term retirement investors to stay the course during times of high volatility, like now with financial markets slumping https://www.reuters.com/article/us-usa-stocks/wall-street-flirts-with-correction-amid-pandemic-fears-idUSKCN20L23U on worries over the coronavirus outbreak's impact on growth.
Their advice? Do not look at your statements. Do not turn off your next automatic contributions. Do not get out of the market, thinking you can get back in at the right time.
If you are anxious and keen to act, there are productive moves you could make other than stockpiling toilet paper for a possible quarantine or cashing out your investments.
1. Save even more
High-yield savings account are something of a misnomer today, but an interest rate of 1.75% at an online bank is a lot better than the .01% that most of the major banks are offering on no-fee accounts. It just takes a few clicks to open up an account.
Then take a few more minutes, go to your online payroll portal, and set up a direct transfer from every paycheck into that savings account. Within months, you will have a substantial emergency savings fund, which most Americans lack.
"Everyone should check in with their finances and see what they can do better, even if it's a small step," said George Barany, director of America Saves, a non-profit division of the Consumer Federation of America, which is currently sponsoring "America Saves Week https://americasaves.org." (https://americasaves.org/).
2. Refinance your mortgage
Look at your mortgage rate. If it is over 4%, you might be able to do better right now.
"Most anybody who bought a house in 2018 or first half of 2019 is in exactly that position," said Greg McBride, chief financial analyst at Bankrate.com.
Rates depend on the property and borrower's specifics, but you should be able to find a rate in the 3% range with no points.
3. Finish your taxes
Want to put some real money in your pocket? Finish your taxes. The average refund last year was $2,869, according to the IRS.
If you are in that range, see if you can put that money back into your regular paycheck rather than lending it to the government for free. One quick way to do that is to fill out the new, overhauled W-4 tax withholding form https://www.irs.gov/individuals/tax-withholding-estimator that debuted in December (https://www.irs.gov/individuals/tax-withholding-estimator).
"It’s so much more straightforward," said Pete Isberg, vice president of government relations at ADP (NASDAQ:ADP), the payroll processor, because it more closely aligns with the tax form.
But it will take some time to fill it out, cautioned Jonathan Barber, senior vice president of tax policy and research at Ayco, a Goldman Sachs (NYSE:GS) company.
"You need to sit down and go through it with your taxes and your paystub."
4. Online shop, but to save
Studies show that loyalty to home and auto insurance companies does not actually pay off - the companies count on your complacency.
"Comparison shop and see what else is out there," said Bankrate's McBride. "Don’t just get in the habit of paying the renewal. Particularly if you are seeing an increase, it’s a ripe time."
When you are shopping those policies, keep in mind that if you put in the time to do the savings steps above, you might have the cash to pay the yearly premium all at once and save up to 5%. You can also usually score discounts for completing online learning modules for safe driving.
"That's time well-spent if you're sitting at home, with the added benefit that you're end up being a better driver," added McBride.
5. Ok, one peek at retirement
Of course, when markets are going crazy, you want to look at your retirement account. One productive thing to do right now is consider making a contribution to a Roth IRA account, where the growth will accumulate tax free.
If you do so, consider where your account is housed. The market is being transformed by zero-commission trades https://reut.rs/3a6s4Ko (https://reut.rs/3a6s4Ko). If you have investment accounts at institutions that are still charging you for trades, consider moving. Even though a fee like $4.95 per transaction may sound cheap, free always sounds better.
