published Mar 28th 2017, 3:00 am, by Suzanne Woolley

(Bloomberg) —
Maybe you’ve been riding that bull for eight years and feel like it might be getting tired. Maybe you’re getting a little jumpy yourself, with all that money in stocks and now the Trump-rally turbulence.

You could use this slightly queasy moment to improve your finances without getting anywhere near the big, (currently) booming equity market.

We asked certified financial planners for practical ways people could use any excess cash to get in better financial shape. Their suggestions may not be as measurable as a stock index fund’s ups and downs, but they offer some real payoffs.First, though, come on, you need an emergency savings fund. Got one? You probably need to add to it. Three to six months of income is the minimum planners suggest; for risk-averse clients, saving a year’s worth of expenses will bring some peace of mind. The invaluable side benefit? Knowing what a year’s worth of expenses is.Here are 10 other ways planners say you can put extra cash to work to bolster your finances.

Get the debt

Pay off your highest-interest debt. Lower-interest debt, as on a mortgage or vehicle, shouldn’t be as much of a concern as long as your total debt remains under about 30 percent of your take-home pay, suggests planner Melissa Sotudeh of Halpern Financial, in Rockville, Maryland.

Turn 30 into 15

Refinance a 30-year mortgage as a 15-year mortgage and use the cash to pay down the balance so the payments don’t change, says Todd Minear, a planner with Open Road Wealth Management in Kansas City, Missouri. Minear gives the example of someone who took out a $200,000, 30-year mortgage five years ago at a 4 percent interest rate. The monthly principal and interest payment on that would be $955 a month. Five years later, the mortgage has been paid down to $181,000, and the homeowner decides to refinance to a 15-year term at today’s rate of 3.25 percent. If that person brought $45,000 in cash to the closing table to make the new refinancing amount $136,000, they could keep the monthly payment right around $955.

Top off your HSA

Fully fund your health savings account if you have one. The maximum an individual can contribute in 2017 is $3,400; it’s $6,750 f0r a family. Financial planners love the HSA because it’s “triple tax-free”: You put pre-tax money in it , the earnings compound tax-free, and owners can withdraw money without paying taxes as long as it’s used for qualified medical expenses.

Go Roth

Consider converting a traditional individual retirement account to a Roth IRA, says Minear. If this makes sense for you—and it’s a bit complicated—a cash pile would go toward paying the income tax on the amount converted into a Roth, which you previously put into your traditional IRA without paying taxes. One advantage is being able to withdraw it later in life without worrying about having to pay income tax on it.

If you convert and the market falls, you’ll have paid more in taxes than if you had made the conversion after the decline. But you can undo the transaction! You have until the deadline for filing income taxes to reverse it, plus the usual six-month extension that’s available—so, this year, until Oct. 18.

Buy what they’re selling

Hire a certified financial planner to create a plan, says Douglas Boneparth, brightly. Well, of course—the guy’s a CFP, at Bone Fide Wealth in New York. It’s still a good idea, since it’s hard to plan for retirement without knowing where you are financially and how much you’ll need.

“You’d be amazed at how less sensitive clients are to moves in the stock market, or in their life circumstances, when they know what their goals are, how much they cost, when they want to achieve them, and which ones to tackle first,” Boneparth says. He charges $1,950 for a plan, which covers issues ranging from cash management to insurance to retirement itself, and includes quarterly meetings.

Max it

Max out your pre-tax workplace retirement accounts, such as a 401(k), if your paycheck leaves you with more cash than you need month to month. If you’re over 50, remember, you can make up to a $6,000 “catch-up” contribution on top of the $18,000 regular contribution allowable for 2017.

Face it
Hire an attorney and complete an estate plan, or at least a will. A recent Caring.com survey of more than 1,000 adults found that just 42 percent had prepared documents like wills or a living trust. The cost of hiring an attorney to draft a simple will is at least $300, according to nolo.com, and more likely about $1,000. For do-it-yourselfers, legalzoom.com says it can create a will “starting at $69.”

Face it, again
Buy a burial plot or two. A morbid but practical suggestion.

Before and after
Use your cash to build an after-tax investment account alongside your tax-deferred workplace savings account, for cash-flow flexibility later in life, says Sotudeh, of Halpern Financial. The earnings on money in workplace retirement accounts like 401(k)s grow tax-deferred, but you’ll have to pay taxes when you withdraw the funds, so those accounts are drawn down much faster than after-tax accounts. Having both kinds gives you extra diversification and retirement security, Sotudeh says.

Invest some cash in cash
Hey! What’s wrong with holding some cash, anyway?

“Nothing,” says Boneparth, of Bone Fide Wealth. “Increasing your reserves in times of volatility or uncertainty can be a strength. If an opportunity arises, you can take advantage of it.”(Updates with example of mortgage refinancing.)

To contact the author of this story: Suzanne Woolley in New York at swoolley2@bloomberg.net To contact the editor responsible for this story: Peter Jeffrey at pjeffrey@bloomberg.net
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