ItΓÇÖs Time For Your "Lazy Money" To Get More Industrious

By Alexander Joyce

EveryoneΓÇÖs goal in the world of investing is a secure financial future.

But it could be that your security, as well as your bottom line, is being victimized by the deadbeat of the financial world, ΓÇ£lazy money.ΓÇ¥

ΓÇ£LazyΓÇÖ money is money that just sits there, not really working for you the way it can and should. And itΓÇÖs money that can end up being eaten away by fees and taxes, not to mention the potential loss of any return on investment.ΓÇ¥

Not long ago, I encountered a good example of money that wasnΓÇÖt being put to its best use. A widow in her 70s, already struggling to get by, was devastated when the homeownersΓÇÖ association in her condo complex announced a substantial fee increase. She was in tears, worried that she would have to move because she didnΓÇÖt know if she could make ends meet.

A friend convinced her to let Joyce review her financial situation.

What I discovered was she had $300,000 in her portfolio and was never shown how to turn that into income. That was ΓÇ£lazy money.ΓÇ¥ I was able to show her how she could have an extra $24,000 a year in income by making this money go to work for her.

ΓÇ£Lazy moneyΓÇ¥ can affect people of all ages, but is especially burdensome for people at or near retirement who need their money to perform to its maximum potential. Otherwise, they could end up struggling to survive as the money disappears and they still have plenty of life ahead of them.

If you want to put a little energy into the ΓÇ£lazy moneyΓÇ¥ in your life, I suggest a few places too look:

• Checking and savings accounts. When youΓÇÖre in retirement, you want to be conservative with your investments ΓÇô to a degree. But you can go overboard, Joyce says. Sometimes people keep higher than necessary balances in their checking accounts and savings accounts. They have quick access to that cash, which is great, but the money isnΓÇÖt growing the way it could.
  ΓÇó Old 401(k) plans. People often change jobs, but are uncertain what to do with their 401(k). So they just leave it with their previous employer and ΓÇ£it sits there and does nothing. You could roll it into a traditional IRA and structure it in a different way to be either conservative or more aggressive, your call.ΓÇ¥ Another option is to consolidate it into a 401(k) with your new employer.
  ΓÇó Little-used options with current employer benefit plans. Sometimes itΓÇÖs worth having a financial professional review how youΓÇÖre investing in retirement plans offered by your current employer. Many employees assume they donΓÇÖt have access to that money until they are 59┬╜, other than possibly to borrow from it, but sometimes they might. He reviewed the plan for one client ΓÇô a woman in her 40s ΓÇô and discovered she was allowed to take the company match portion of her 401(k) and contribute it to a separate IRA.

So many people donΓÇÖt realize they even have ΓÇ£lazy moneyΓÇ¥ and that there are opportunities to put that money to work. A good financial professional can help them determine whether their money is doing everything that it can.ΓÇ¥

Alexander Joyce is president and CEO of ReJoyce Financial LLC (www.ReJoyceFinancial.com). HeΓÇÖs also a Safe Money and Retirement Income Planning specialist, and has hosted radio shows, such as ΓÇ£The Safe Money and Income Radio ShowΓÇ¥ and ΓÇ£The Ask Mr. Annuity Radio Show.ΓÇ¥ Joyce is a licensed professional in Indiana and specializes in working with people who are near retirement or who are already retired, with wealth management, income planning, and asset protection strategies.