By Eric Reich
This is the fourth and final article in the series on the stages of retirement planning. Next to the pre-retirement phase, this is, in my opinion, the next most important part. If you had done everything you needed to do to set yourself up for an enjoyable retirement before you retired, had a blast living out your dreams doing all of the things that you worked so hard to be able to do, took time to appreciate your family and friends while settling into a “normal” retirement life, then now is time to think about your legacy.
This stage is unique because this part of retirement, while still about you, begins to encompass more than just the self. This is where the culmination of all of your life’s work can live on beyond your life. Legacy planning is designed to have an impact on the world around you. Perhaps it’s for your children, grandchildren, or an organization that you are passionate about. Like the pre-retirement phase, legacy planning requires a lot of thought and help from others.
Characteristics of legacy planning include making plans, considering health costs and thinking about what you will leave to whom. Let’s dive into each aspect.
Lots of planning!
In order for your wishes about your legacy to come to fruition, you need to assemble a team of specialists to help you on that path. Your estate planning attorney, CPA and financial planner all play a part in helping you realize your legacy. Getting all of your estate planning documents in order is crucial both for your wishes during your lifetime as well as after you’re gone. Failure to do this will almost certainly create unnecessary stress and hardship for your family. Before you can get all of these documents in order, you first have to think about the next item, which is:
What do you want?
This is a lot harder to answer than you might expect. You might be inclined to say, “I want my kids to get everything.” However, there may be a need to dive a lot deeper than that.
What are the logistics of your wishes? If you have three kids and one beach house, it’s unlikely that they can share it. People have busy lives with kids who also have busy lives. Saying they can take turns is a logistical nightmare, if not impossible. I have three kids and one classic Corvette. Of course, they all want it. These are the types of questions that you need to consider in the planning process.
Most importantly, don’t keep your wishes a secret! If something is important to you, then let your wishes be known to your heirs. This can help them carry out those wishes in the event that you can’t.
Who gets what?
One question I ask people in the estate planning process is, “Do you want to treat your heir equally or fairly?”
At first glance, they might seem like the same thing. However, they definitely are not. Family members in a business should get the business, not those who don’t work there. Those heirs can be compensated in other ways. Those who are an active and ongoing part of the family might be considered differently than those who are distant. The same goes for those with different financial resources. There are no wrong answers here, just things that you might want to consider.
Health costs
This stage of retirement can unfortunately be one where the costs associated with healthcare can rise dramatically. Doctors, medicine and of course long-term care can have a big impact on your standard of living at this stage of retirement. Planning for these potential expenses is crucial.
The legacy stage of retirement can be a wonderful time as it lets you reflect on a life well-lived and all that has resulted from your life. Thinking about what you want and getting the planning process started for life beyond you brings peace of mind for both you and your family.
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. Reich Asset Management, LLC is not affiliated with Kestra IS or Kestra AS. 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 with regard to your individual situation. To view form CRS visit https://bit.ly/KF-Disclosures.
Eric is President and founder of Reich Asset Management, LLC. He relies on his 25 years of experience to help clients have an enjoyable retirement. He is aCertified Financial Planner™ and Certified Investment Management AnalystSM (CIMA®) and has earned his Chartered Life Underwriter® (CLU®) and Chartered Financial Consultant® (ChFC®) designations.
