Retirement Planning: Leaving a Legacy for Your Family (That Will Stand the Test of Time!)

Leaving a legacy is often connected with money and real estate – but not always. Join us in discussion with financial expert Pam Krueger whose advice is sure to shed some light on the topic. Enjoy the conversation!

Margaret Manning:

My guest today is financial and investing expert Pam Krueger. Pam is a co-host of the PBS TV show MoneyTrack, and she’s also an author. But most importantly, Pam has created a tool called Wealth Ramp, which connects fiduciary advisors with consumers. She is a wealth of information when it comes to all things financial in this time and age. Welcome, Pam.

I love to talk with you because you’re so action-orientated and practical in your advice, which is helpful for money discussions.

Pam:

I got into the business of financial services when I was 24. All these years, I’ve been listening to women, especially at retirement age or beyond, talk about their biggest fears and their financial questions, and I’ve noticed something remarkable.

No matter how much money they have, the questions are always the same. And what’s even more remarkable is that they never ask about the economy or math or the stock market. It’s all about lifestyle and peace of mind.

Margaret:

I am sure that’s true. One of the questions that keep reoccurring in our community has to do with planning to leave a legacy to your children. You want to leave them some money that you worked hard for, so they can have a better life. But then you realize that it simply isn’t possible. So, what can we do in that situation?

Pam:

Many women go through divorce or lose a spouse after 55. So, by the time you’re at that point where you’re really thinking about leaving a legacy – and it may not be even about your kids, it could be about a cause you always wanted to support – and if you haven’t been able to set aside a little something for that legacy, you face self-judgment and guilt.

When they see that their expectations and hopes are unrealistic, many women take their own savings and put their own selves at risk because they think they’re supposed to fulfill the promise they made to themselves about leaving that legacy.

If you find yourself in this kind of situation, the very first thing you need to do is figure out: “What do I really want my legacy to be? My plan was to leave enough behind to help the kids and the grandkids in the family or the cause I feel passionate about. How can I plan to do it, at this point, with so many unknowns that are going to impact my own life and without removing my own life preservers?”

First and foremost, think about your legacy. Sit down, take a piece of paper and list what you want your legacy to be. What’s your reasoning and what do you care about the most?

That’s a great calming exercise because it helps you to see either how far off you are, or how close you are. Even if you’re far off, it helps you to see that your goals aren’t realistic, and that, from a psychological standpoint is very important.

Margaret:

It definitely can bring a certain level of calmness. Now here’s something I wanted to mention to you. A lot of women in our community have shared that their lives turned out to be nothing like they had expected.

I know from personal experience that this is true because nothing has turned out exactly the way I thought it might. When I think about my legacy, of course I do think about the financial side, but more often, I think about the wisdom I can share and the joy we can have just being together as a family.

In many ways, I’m reprioritizing the things I do to spend more time with them. So, with this in mind, the large portion of my legacy will be in the memories we make having fun together, hoping to create more attachment to their little hearts.

Pam:

I couldn’t agree with you more. When you say it like that, it will make people stop and say, “Why am I stressing over this?”

So, there are two things I want to discuss here. The first one is this: let’s redefine, recast, and reframe the whole notion of leaving a legacy. Take the money out of the picture.

The lessons that you can impart to the next generation, listening to the kids and just being close to them has a much greater impact on their life.

Volunteering in your community, if you’re physically able to do that can have a great effect on your neighbors and that is a kind of legacy as well.

When you spend time with your kids or grandkids, be supportive, listen to them, help them to remember you. Teach them those special things that only you can pass down to them. These could be lessons of the good, the bad, and the ugly in life – about money, family, friends, etc.

What I like about this concept of legacy is that it opens up the conversation. Now, instead of you holding it all inside, thinking that no matter what you do you just have to leave them something at the point of your passing, you have reframed it.

So, while you’re alive, give everything you can that will make a lasting memory for that child or grandchild. That opens up the opportunity to have an open dialogue about your financial situation.

Margaret:

What you just said, may be the most valuable concept in this discussion. When you have a trusting relationship with your children and grandchildren, you can teach them about the mistakes that you may have made with money.

We all want the next generations to be smarter, more successful and happier than us. We want to save them the mistakes we made. In my legacy, I want to teach my children to be wiser when it comes to money and to make better financial decisions. If they understand the consequences of spending and not saving, that’s a gift.

Pam:

Exactly. Here’s the thing though, money comes, and money goes, but those memories we make are the essence of it all.

Here’s an example that is connected to money and leaving a legacy. On the airplane, why does the flight attendant explain that you must put your oxygen mask first, and then adjust your child’s? We all know the answer: if you die from lack of oxygen, your child will face the same fate, right?

In financial concepts, you want to have enough money to last you however long you may live so that you don’t become a burden to your kids or grandkids. That right there is a legacy in itself.

Don’t think you could live frugally so you can leave money behind. That will likely cause a lot more problems for everyone. So, plan for yourself first. God willing, you’re probably going to live into your 90s as women over 60 often live that long.

With that in mind, make sure you have enough funds for yourself first, to last you for that long, and then you can help your kids.

Also, you shouldn’t forget other assets you have that may be of value to your kids or grandkids. When my mom died, and she was 94, I knew that my siblings all wanted things that were valuable to them: furniture, vases, silverware, a chandelier, whatever.

Before she died, though, my mom took the time to talk to each of us about the things we’d like to keep, that were important to us. That’s the key – having an open communication.

If you sit down and talk to your kids, you wouldn’t believe the things that are of value to them. So many things can have sentimental value: books that were read to them as children, jewelry, chairs. Many of those things may not be valuable at all, but it’s the meaning and memory behind them that really matter.

Most of the time, those are the kind of assets that we end up wanting when a loved one passes. Money kind of goes out the window because emotional attachment really is priceless. Opening up the discussion now, while you’re alive, will have you find out what’s important to them, and I’m sure you’ll be shocked.

Margaret:

I’ve already sensed that with my children and grandchildren. There are some things that they know meant a lot to me, and that is what’s valuable to them. It’s the connection, that’s really important.

For instance, I have this ring which has a story and a special significance to me because of where I bought it. I love it and my son knows about this.

Every time I visit with my little grandson, he grabs the ring and looks at it, communicating that he wants it. I say to him that when Bubba’s not here, I’m going to give him this ring.

He’s just a toddler and doesn’t understand any of it, but in my heart, I know I’m establishing a connection with him beyond the ring. It’s about him loving something that represents me. That’s my legacy to him.

Pam:

That’s really thoughtful and sentimental. It’s all about the emotion and the memory. Circling back to money, the only people who can really leave money and real estate behind are people who can afford to.

Sometimes, though, being wealthy isn’t such a good thing, Margaret. You are going to be stressed out about it, and many people decide to leave it to their kids or grandkids to work out the issue of money among themselves. They won’t.

If that’s what you do, you’ll be leaving a negative legacy because you didn’t have that conversation with your offspring. The big family fight has to happen while you’re alive because if it doesn’t, it’s going to happen among the kids.

After you’re gone, emotions will be running high, and nobody will be happy. In such situations, everybody feels shorted. When it involves a lot of money, instead of being grateful, the kids feel nothing but anger and resentment toward the parent or the grandparent.

So, what we’re talking about here has very little to do with finances. It has everything to do with talking openly with your family and deciding what is your legacy, whether it’s financial or not. Whatever it is, though, take care of yourself first? Put your oxygen mask on, then help your child or grandchild.

Margaret:

This is such great advice. I knew that the topic of legacy wouldn’t have us digging into deep financial matters because many people don’t have much money saved to leave behind. So, mostly we feel guilt about that.

But, I would really suggest that you have an open conversation with your children about your situation and about any possessions that you’d like them to have.

You can also get in touch with Pam on her website, and maybe there’s a point at which to involve a fiduciary financial advisor, who will sell you his time at a set fee and give you the best financial advice he can.

Pam:

Actually, a real financial advisor, or planner, is someone who’s in your life, holistically helping you to deal with all life’s events. They’re there to walk you through very awkward and uncomfortable situations because they’re real advisors and you’re paying them to guide you.

It’s not just about taxes and portfolio though. If you really want to put this legacy thing into practice, to see whether you have enough money to last you the rest of your life, then make the decision about what could be left over, the real advisor will help you with that.

Also, a great advisor will involve your kids and grandkids in the conversation. So, having an advisor sit down and educate the family about the financial possibilities can be a game-changer for your peace of mind.

Margaret:

It’s incredible how many elements there are to this topic, and that’s because money is just woven into every aspect of life. Thank you, Pam for being here. It’s such a pleasure to talk to you.

Pam:

It’s great talking to you too, thanks.

Margaret:

See you again. Bye.

What kind of legacy are you leaving your children and grandchildren? Are you keen on leaving money or would you rather do something more meaningful? Have you had the legacy conversation yet? Please share your personal experiences and stories to help the community get some peace of mind.