The Value Of Legacy

The Three Pillars of Retirement Money Management: Income, Liquidity, and Legacy

Before diving into the importance of legacy, let's briefly touch on how money functions in retirement. There are three key roles: Income (the cash flow you need to live), Liquidity (money set aside for emergencies and growth), and Legacy (what you leave behind). This article focuses on the last of these pillars: Legacy.

Financial Legacy: Beyond Just Dollars and Cents

A financial legacy might include life insurance to protect your family in case something happens to you or an annuity that funds a trust for a child with special needs. It might even mean directing your required minimum distributions (RMDs) from a retirement account to a cause you care about. These are all excellent ways to ensure that your loved ones or chosen beneficiaries are financially secure after you're gone. But remember, there's more to your legacy than just a financial transaction.

The Non-Financial Legacy: The Heart and Soul of Your Legacy

Your non-financial legacy is the emotional, educational, and sentimental treasure that complements your financial legacy. It might include your story, family traditions, values, ethics, and moral teachings. This could be as simple as writing a letter to your grandchildren explaining the family history behind a specific asset they will inherit. It could involve organizing cherished family recipes or cataloging personal possessions that might not have a high monetary value but hold emotional significance, like a worn-out baseball glove from Grandpa.

Practical Scenarios: A Balanced Legacy in Action

Here's an example: Say you must take RMDs from your IRA but don't need the income. You could use the money to set up a college fund for a grandchild. To add a layer of non-financial legacy, include a video recording sharing your family values of education, togetherness, and altruism. This combination adds depth and meaning to your legacy.

Another example involves life insurance. If your spouse, the primary beneficiary, passes away, you might make your children the new beneficiaries. To supplement this, create a multimedia story outlining the purpose of the life insurance policy. You could also include stories about your late spouse to keep their memory alive. Maybe even share that special recipe of Mom or Dad's favorite dish.

Your Legacy is a Lifelong Project

You don't have to be a millionaire to leave behind a rich legacy. Charitable giving, family business planning, and special needs trusts are just a few ways to create a legacy that stands the test of time. The financial services industry often focuses on your financial legacy, but your non-financial legacy is just as important. Together, they confirm the "why" behind your financial gifts, adding meaning and value that will be appreciated for generations.

In short, your legacy is not a one-off decision but a lifelong project that encompasses material and emotional wealth. So, take the time to think about the kind of legacy you want to leave. After all, it's the most valuable gift you'll ever give.

Talk to a financial advisor to align your retirement plans with your legacy goals. Consult your family members to know what non-financial assets they hold dear. And most importantly, take the time to document your values, stories, and memories—because that's what transforms your legacy from a balance sheet into a treasure trove of wisdom and love.

• A legacy encompasses both financial assets and non-financial gifts, such as values, stories, and traditions.
• Using tools like multimedia recordings can help in preserving and enriching family histories, complementing the financial legacies.
• It's essential to balance both elements for a complete, meaningful, and long-lasting legacy.

Many people have learned about the power of using the Safe Money approach to reduce volatility. Our Safe Money Guide is in its 20th edition and is available for free.  

It is an Instant Download.  Here is a link to download our guide: 

Safe Money Guide - Annuity.com