In these modern generations, we are prone to fret about what financial assets we will be leaving for our children and grandchildren after we pass on from this life. The fact that over 60% of millennial’s – the generation born between the years of 1981 and 1996, in general – report expecting an inheritance from their parents, can only add to this pressure.
Many factors contribute to the unlikelihood of this expectation being met. With rising costs of living reaching record highs, most of our income is going toward staying afloat. A recent report has found that almost 80% of those employed in the United States are living paycheck-to-paycheck, so there is precious little leftover for estate planning. We are also living longer as a society. This means that the savings, retirement, and social security funds that we have managed to gather need to be stretched out over more and more remaining years. There will be less remaining in the pot by the time we pass it on.
For those of us in such a position, there is an alternative to fretting. We can begin, today, to shift our minds away from what we don’t have – and can’t do – toward what we have and can. A change in perspective can bring much-needed relief to our worries about leaving a legacy. The following are a few suggestions to apply in your quest for finding peace when facing these concerns.
Focus on a Legacy That Lasts
Most of us are familiar with the folk song, “Cats in the Cradle.” The lyrics provide a painful glimpse into the life of a man who thought that his legacy of hard work would be appreciated by his offspring. Instead, he found that a life dedicated to bringing in the most money possible only resulted in his own loneliness and isolation.
Take some time to consider what it is that you want to be remembered for, and why. Did you provide your family with an education that your ancestors didn’t have the luxury of receiving? Did you teach your children the value of honesty, or how to be compassionate to others? Consider writing your own eulogy, as a way of making sure that these accomplishments are highlighted. If tooting your own horn in this regard doesn’t appeal to you, find a loved one who can write these lasting contributions down and recite them at your memorial service. Being an active participant in the construction of your eulogy is one way to leave this world with the assurance that your loved ones know what it was that you found important.
A Little Can Go a Long Way
Every birthday, as a child, my grandmother would send me a $5 bill. Even though I was so young, I knew that my grandparents were living at the poverty level. My grandma worked her fingers to the bone after my grandfather had died – even after she herself had suffered a debilitating stroke. It was the only way that she could keep a roof over her head and food on the table. Knowing this fact made that five-dollar birthday gift seem like a fortune. She was lovingly sacrificing her recreation money – or maybe even her protein source for the week – to make sure that I knew how important I was to her.
The idea behind this sentiment illustrates the above concept of focusing on what lasts. It is often not how much we give, but how we give. Taking the time to decide upon which small tokens of affection will mean the most to certain family members can take the place of cold calculations of financial distribution percentages. Do you have a granddaughter who always admired your costume jewelry? Or a nephew who shares your love of gardening? A piece chosen with thoughtfulness, or a personal item selected with care, can mean more than money when passed on in a sentimental way. Adding a personal property memorandum to your will is all that it takes to make sure that your precious belongings go to those who will appreciate them.
Still Time to Increase the Potential
For those of us who are in a position to increase our financial holdings, there is still time to be proactive. The recommended age by which we should be making concrete plans for our passing is 55 years. This age category means that, for many, the children have left the nest. With the prospect of several productive working years still ahead, there is ample opportunity for you to apply the money saved on child-rearing towards increasing your investment funds.
Always take advantage of employer programs for matching retirement funds, as they are, more or less, free sources of cash. You can also take advantage of the catch-up process, through which the limit on the amount of contributions that can be made during a given year is increased. After ensuring that you will have enough retirement to live on, you can calculate how much is likely to remain after your passing, and can complete the paperwork to ensure that your beneficiaries will receive appropriate distributions.
A college savings plan is another valuable way to ensure that you will be remembered for generations to come. For grandparents, small contributions made while the child is growing up can result in a nice stash for furthering their education when they become of age. You can use a tuition planning calculator to determine how much your contributions will helping, even after your passing. Even if your legacy doesn’t cover the full costs of their education, there are sure to be no complaints over receiving the windfall.
Deciding When to Give
While many people choose to outline specifications for how their possessions will be distributed after death, there is also the option of passing on our assets during our lifetime. Taking stock of what we find valuable – and what others will find valuable – can be a therapeutic experience. Additionally, sharing in the experience of passing on our valuables creates the conditions for interacting with our loved ones while we are still a living legacy.