Retirement Assumptions: What’s Your Legacy Goal?

When you are building out your long term retirement plan, a financial advisor will often have to make many different types of assumptions. I have authored numerous articles around this topic. You need to consider market downside risk, interest rate risk, inflation risk, liquidity risk, tax risk, sequencing risk, and several others. Often, one major mistake made around the discussion regarding building a quality retirement plan is actually having the end in mind. What do you want your legacy to be when you pass on?

This is a crucial conversation to have at the onset of your overall comprehensive financial plan. Consider this for a moment. If you tell your financial advisor nothing, he or she will likely build out your retirement plan analysis by using a ‘death age’. From the conversations you have with your planner or from some default number in the financial planning software, you will arrive a set age usually in the 85 to 90 range. While that rage may be fine with you, most financial advisors will build out your retirement plan with a legacy goal of ZERO! Does that surprise you?

The reason that determining your legacy is so important in your conversations with your financial advisor is that the amount of money you really need to save, the rate of return you need to achieve on your portfolio, and how much money you can realistically distribute throughout retirement will dramatically change depending on whether you tell your advisor that you would like to die with nothing left to your kids or if you would like to leave the kids with at least some sort of inheritance. Have you had this discussion with your advisor?

When you are in the age range of early 40’s to late 50’s, it’s often hard to think about your legacy. Especially when you are still working on your career or business while also putting your kids through school. For most people, it’s not until they turn the age of 70 (in some cases 80) before they get very serious about building their overall estate and legacy plan. When you go through the financial planning process in your accumulation years, estate and legacy planning are usually an afterthought in the overall conversation.

At some point this year, you will either begin the financial planning process or review the financial plan you have already created. When you assess your progress, it is probably a good idea to discuss the assumption around your legacy goals. If all your other assumptions look great in your financial plan and this one is wrong, you’ll be fine when you are old and gray but your kids may end up with nothing.

Written by:
Ted Jenkin

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About the author  ⁄ Ted Jenkin @ Your Smart Money Moves

Ted Jenkin @ Your Smart Money Moves


My friends and family all think I’m a workaholic, but I say I’m just a guy that loves to help people do better in life.

My mother is still the only one that calls me by my real name Theodore Michael, my wife calls me Teddy, but for the rest of you it is just plain old Ted.

Ever since I was a little kid, I always loved money and being an entrepreneur. In fact, I still have cassette tapes of me talking to my grandmother at the age of five and my mother tells me all the time how much I played with money as a kid...

Read More About Ted Here

Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express. He is the co-CEO of oXYGen Financial. You can follow him on LinkedIn @ www.linkedin.com/in/theceoadvisor or on Twitter @tedjenkin.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor regarding your individual situation. 

Background and qualification information is available at FINRA's BrokerCheck website.

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