Leave a Legacy by Planning for Retirement

Written by Dave Young, President

On a recent trip, I recognized the value of leaving a legacy. My trip reminded me of the sacrifice, hard work, vision and commitment made by others that have benefited me immensely. The gift of my ancestors has enriched my life and provided amenities for which I am grateful.

As I reflected on the greatness of leaving a legacy, it brought to mind the importance of leaving a financial legacy and the benefit of creating a nest egg for progeny and future generations.

It is prudent to not only prepare for retirement, but to keep in mind the beneficiaries of residual retirement and other savings and the enriched lifestyle it affords to them. I have one client in particular who communicated how important it is to him that his spouse and his children and their children are financially taken care of upon his death. His top priority for investing prudently and wisely is for the benefit of his family. In choosing Paragon as his financial advisor, it was important to him that his priorities were equally important to us.

The value of leaving a financial legacy is priceless for both you and your family. First, your financial preparation allows you to be self-sufficient during retirement. Your preparation contributes to your peace of mind knowing your family will have increased financial ease. And in some cases, a monetary gift now to family members translates into tax benefits to you now. Most importantly, the simple act of giving is empowering and fulfilling for you.

Your progeny, of course, also benefits from you gift and preparation in countless ways. First, your monetary gift continues its growth possibly for years after death. Your gift enriches the lives and lifestyle of its beneficiaries-- college education paid for, down payment for your newly married son or daughter, unforeseen financial strains eased etc. etc. Your preparation also sets a precedent and begins the pattern and habit of financial intelligence and education for years to come. Your gift opens doors and opportunities to financial success that otherwise may not have been available. Most importantly, your forethought, sacrifice and commitment will be remembered, appreciated and emulated by the next generation.

I am a big proponent of retirement planning, and planning now. One way to give to our families is by naming spouses and/or children as beneficiaries of IRA's, 401(k)s, etc. Not only designating beneficiaries, but apprising family members that they are the recipients of such a gift. And then follow up with education on prudent investing when the funds transfer to their possession. Several different retirement options allow significant contributions, tax deductions, and ample time for growth and compounding. Of course, it is always important to consider risk, inflation, tax bracket, and investment time horizon, etc. when considering how to invest retirement monies.

Another option to ensure future generations benefit from your financial success is to establish trust. Trusts specify to whom assets are to be allocated and of course, are legally binding. Trusts also aid in estate planning and reconciling this aspect of financial planning. Most importantly, as my client did, make it a priority to leave a financial legacy.

My trip was enlightening as it reminded me that it isn't all about me or us, but about what we give to others and the principle this instills in ourselves and in our families. Leaving a financial legacy to our families and future generations is empowering to both the giver and the recipient, and it is a gift that can grow for years to come.