What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer words. Click on the number to jump straight down to the question.
1. Rebalancing my retirement funds
2. 2019 Roth IRA contribution date?
3. Prepping as hobby after this?
4. Work from home new normal?
5. Disney+ and family movie night
6. Withdrawing cash from bank?
7. Helping out while unemployed
8. Mortgage break question
9. Water and routines
10. Early retirement still a goal?
11. Stretching as time to relax
12. Handling the funk
Many of the questions that people have asked recently center around what happens after all of this is over. When things return to normal, what will we do?
The truth is that no one knows what will happen when things return to normal. No one. We all thirst for answers, but we’re at one of those turning points where there are no answers.
Some things — many things — will return to the way things were. Other things? It’s hard to say. I think there are a lot of businesses that are going to have a very hard time surviving and coming back from this. I think that some aspects of daily life will change for everyone, at least for a while, and I expect that there will be some differences between the way things were and the “new normal” that will emerge.
I will mention three things that have given me some solace during these times.
One, the Spanish flu of 1918 to 1919 was followed pretty directly by the “roaring ’20s,” a 10-year economic boom.
Two, this is a society-wide shared experience. So many of us are going through the same things right now, across economic and social differences. People throughout the world, similar to you and different from you, are going through very similar things and having very similar feelings to you, right now. We all have way more in common than the differences between us. We’re all experiencing the same worries and fears and many of the same moments of grace. Undoubtedly, some of us will suffer more than others, for reasons far beyond their own choice. The question is when this is over, what can we do about it? This is a very unique time to reflect on the realities of the modern world, and we can and should take advantage of it.
Three, the more I find for my idle hands to do besides just reading the news, the better I feel. Keep busy. It helps.
On with the questions.
I have seen a lot of people on TV suggesting that people should think about rebalancing their retirement funds right now. What does that mean?
Let’s say that you decided a long time ago to have half of your retirement savings in a stock market index fund and the other half in a bond market index fund. When you contribute, half goes into bonds and half goes into stocks.
Over time, one of them might grow in value more than the other one, or one of them might lose value more than the other. However, you want to stick by your plan to have half of your money in stocks and half of your money in bonds. The way you’d do that is by taking money out of the more valuable one and putting it in the less valuable one so that they’re 50/50 again.
Now, is rebalancing a good idea right now? It’s really hard to say. In general, the advice is that one shouldn’t rebalance in a period of high volatility, and we’re certainly in a period of high volatility in almost every economic market.
If you feel a strong desire to rebalance right now, I would encourage you to simply change your contributions rather than changing your current investments in a way that you feel will lead you back to where you want to go.
If you just have money in a target retirement fund, the consensus seems to be that people should sit tight and wait out this roller coaster drop.
I know the official filing deadline for 2019 income was pushed to July 15 but I can’t find any info about whether you can still do 2019 Roth contributions until then.
Yes, the official filing deadline for 2019 income has been pushed to July 15. The previous deadline seems to still apply, which was that 2019 Roth or traditional IRA contributions need to happen on or before April 15 or the day on which you file, whichever is earlier.
To be safe, I would make those contributions before that date. I think there is some chance this deadline will be extended as well (and perhaps it has, by this writing), but I wouldn’t bet on it.
This does not affect 2020 contributions. This is just some extra time to make contributions that count for 2019.
I wonder if there will be a boom in “doomsday prepping” as a hobby after this where people prepare their homes to be places that they don’t have to leave for several months if needed.
I can definitely see this happening for a certain segment of the country, particularly homeowners who see their situation as being more fragile than they thought.
Honestly, in terms of hobbies that are financially reasonable, some level of preparedness has a lot of value. Having a lot of canned goods that can last for years, having a garden that produces food, having chickens that can produce food, having a generator and so on. Those things are items that can seriously help in challenging moments.
Prior to this, our level of “preparedness” mostly centered around having a lot of dry goods on hand — beans, rice, pasta, and flour, along with household supplies. We mostly do this because we actively use this stuff and buying it in bulk is a money saver if you’ve got room to store it (which we do). We also actively garden — in fact, we expect to use time in April as the weather warms here in Iowa to get our garden in tremendous shape, and I expect we’ll have the best vegetable garden of our lives this year. We have a bunch of compost ready to go (from simply dumping it in the bin) as we didn’t use much of it last year, so the soil should be really rich, and we have tons of time to get a garden going and may end up using more of our yard for gardens than we have in the past. Some of our neighbors are doing this as well, which makes me wonder what farmers’ markets will be like this fall.
Anyway, it’s a very interesting thought.
My job moved to work-from-home almost four weeks ago now and it seems to be working out for a lot of people. We have figured out some good ways of communicating with each other and I feel like I have way more time to just focus on my harder tasks without being interrupted with office chatter since I can so easily turn it off for a while. I am actually wondering whether we will even return to working in an office and then that leaves me wondering whether this will be a thing for a lot of people with desk jobs in the future.
I expect that a lot of jobs that weren’t previously work-at-home jobs may become work-at-home jobs after this, and I think the skill set needed to really make working from home productive will become more valuable than ever. Self-directed people who can just get their stuff done without needing a boss over their shoulders are going to become even more valuable.
I suspect that some jobs will return to office environments, but I expect that will change to some extent, with people able to work from home at least part of the time if their work allows it.
This is one of those things where I think the world will change a little after this. For a lot of information economy people, it’s going to be shown that you don’t need to be in an office to get work done, and that’s going to change a lot of policies at a lot of companies. I suspect partial work-from-home will become a very big thing in the coming years, and full work-from-home will happen more and more often.
I’m going to have an article later this week that’s a thorough beginner’s guide to working from home, sharing everything I’ve learned about making it work and hitting deadlines while working from home the last 10-plus years. I hope that the advice is valuable to those working on making that transition.
Wanted to say that with two young kids at home subscribing to Disney+ has been a huge lifesaver. We have made watching a Disney or Pixar movie a nightly “movie night” tradition that the kids look forward to. We are watching Disney movies and Pixar movies in release order, alternating back and forth. It costs $7 for a month. Given the sanity and regularity it has brought to our family right now, best deal ever.
It has all of the Disney, Pixar movies, Marvel and Star Wars movies. Even if you just subscribe for a month, $7 gives you a pretty healthy pile of family movie nights.
My general feeling on streaming services is that it’s a good idea to hop between them. Stick with one until you’ve watched everything of real interest to you on there (and the rabbit hole is pretty deep on some of them, especially Netflix), then cancel (or pause) and move to another.
I will say that if you’re dealing with kids at home right now, particularly multiple kids, having a fresh kid-friendly movie to watch pretty much every evening as a “routine” to provide some normalcy and joy to your days is a good pattern, and Disney+ is pretty good for that if you have decent internet service.
Do you think it’s a good idea to withdraw some cash from the bank right now?
Unless you have more than $250,000 in cash sitting in the bank, there isn’t much of a reason to have more cash on hand than you might need during a typical week. Having more cash than that on hand turns one type of risk into another type of risk.
The advantage of leaving cash in the bank is that it’s FDIC insured up to $250,000. That insurance has never failed, ever, and if it did, it would likely mean that your cash is worthless, too. It’s honestly safer in the bank than it is in your house.
So, why should you have any cash at all? There are times where you need cash where you might not be able to make it to the bank, and having enough cash in hand to get through those moments is a good idea. I’d have enough cash on hand to buy a week’s worth of living expenses, but there’s no real need to have more than that. Again, if the FDIC fails, the dollar is probably collapsing and this is a non-issue.
Currently unemployed, the restaurant where I worked maybe out of business. Husband works from home right now and says his job is fine. Not sure what I can do right now to help with money.
One major thing you can do is to be as supportive as you can of your partner while he’s working from home. Give him uninterrupted time and space to focus on work tasks and keeping that job. Don’t interrupt him unless it is really urgent.
When he’s working, fill those hours being productive yourself. Make all the meals and some extras to put in the freezer. Make a meal plan for the coming week. Get caught up on every household chore. Do maintenance on the appliances, and if you don’t know what to do, look them up. Go through all of your bills and cancel any services and subscriptions you’re not really using. If you run out of things to do, look through this list for more ideas. If there’s anything you can do to get yourself ready to return to the workplace, do that, too – it’s really hard to guess what that might be without knowing more of your background, but there may be things you can do.
Treat the time he’s working as time you’re working, too, on those household tasks, so that you can spend leisure time together when he’s done working. Keeping yourself busy keeps your mind straight, too.
My mortgage lender sent me a letter informing me that my mortgage is on a six-month break, meaning I don’t have to make payments and interest won’t be accrued. Should I continue to make payments on it if my situation is okay?
If I were you and the mortgage is not accruing interest for six months, I would make those “payments” to a savings account of some kind and then turn over that lump sum in six months when normal payments start again.
The big reason for doing this is that there’s no reason to lock down that money in your mortgage. If you make a mortgage payment with it, that money’s effectively locked up and you can’t do anything with it if you need to. There’s also the second factor that the money will earn a little bit for you in savings over the next several months.
There is the temptation to use the money for something else, but if you have some financial diligence, you should be able to resist using it unless a major emergency occurs.
Something I have learned during this is that I don’t drink enough water! Before I always had a mug of some kind of beverage on my desk usually soda or coffee but at home, I don’t do it. I realized that I felt kind of funny and that’s why! So I started having a big 32-ounce water bottle with me all the time at home and it has helped!
It’s funny what you notice when you completely upend your daily routines. If you have a set routine that you do each day and then suddenly that routine is completely upended, it’s not surprising that there are ripple effects like this.
For example, I used to have a daily work routine that worked really well when the kids were in school, and then another daily routine that worked well during the summer when I could work part of the time at the library. Since the kids are home and the library is closed, I’ve had to kind of ad-lib my daily working routine and come up with something that works. It involves working in one spot in the morning, then to another spot for working in the afternoons, and a lot of time with noise-canceling headphones on my head.
We’re all figuring it out as we go!
Do you feel that your goal of retiring early which a lot of people have these days isn’t realistic anymore?
Honestly, I don’t know. Sarah and I were looking at a 10- to 15-year timeframe for our early retirement, putting us in our early-50s. Our goal was to make sure all of our children were out on their own before officially deciding to retire. We hadn’t made any direct financial moves that assumed an early retirement date.
I did expect at least one or two major stock market corrections before we retired, so this isn’t completely unexpected.
I feel much worse for folks who were either near a decision like this or had recently made it. For almost all of them, their plans are now in complete disarray on top of all of the other societal uncertainty going on. However, no matter how things turn out for those folks, they do at least have a nice financial cushion that should last for a while, even if it means returning to work or making other unexpected changes.
Wanted to really recommend stretching/simple yoga as time to relax and calm the mind. You can do it basically anywhere and if you just let yourself go in the moment it really feels like a brain reset. Helping a lot right now!
I wholeheartedly agree! I often talk about meditation, which is something that’s really helpful to me, but yoga/stretching and prayer and journaling are all things people can do to really relax their mind in a deep way, and that can really help during this time.
I really like this 30 days of yoga series from Yoga with Adriene as a starting point for people new to this. It starts off really gentle and easy.
This is a really nice simple breathing meditation, fairly similar to what I do. It’s worth noting that this exact practice works well as a prayer of sorts – do this exactly the same way, except make a short repeated prayer your source of focus.
This is a stretching routine I really like, too. For a long time, I did this daily, but I now do my own thing that’s a little different (I do it most days).
All of these things provide a great opportunity to let your mind unwind a little bit and de-stress. I do at least one of these things each day, usually more than one, and it always helps. I feel better afterward, and it feels like it builds on itself if I do it every day for a while.
The biggest challenge for me right now is that I seem to kind of fall into a funk a couple of times a day where I just want to sit here and curl up under a blanket and cry for hours. I have to make myself get up and do something.
I think we’re all feeling some of this. And I think you have the answer already — make yourself get up and do something.
Writing is a big part of what I’m doing to keep sane. I’m finding questions that people are asking or things that I see people I know worrying about, and then I research them and look for what I know and what I’ve stored in my big archive of notes (I have all kinds of notes for post ideas or general reference squirreled away in Evernote), and try to answer that by turning it into an article. Almost everything I’ve written in the last two weeks has been an attempt to answer a worry or a stress that someone’s had, and doing that is keeping me focused.
It is hard, and there is a temptation to fall into a spiral of grief, but the best antidote I know of is to, as you say, make myself get up and do something. If I can’t write, I read. Sometimes it’s work-related, sometimes it’s just a fun novel. I try to get some exercise. I do some projects around the house. I play a game with my kids, play a computer game, or just have a chat with Sarah. When the weather isn’t cold, I like going out in the yard or taking a short walk (I live pretty rural, so I can go on a walk and not see another living soul other than maybe a car or two going by if I go in the right direction).
Get up and keep going. Take it one day at a time. It’s the best any of us can do.
Got any questions? The best way to ask is to follow me on Facebook and ask questions directly there. I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.