Millionaires and billionaires aren’t the only people who can leave a financial legacy—you can, too. Regardless of your income, you have the ability to make a positive mark on your family’s future or a favorite charity by leaving a financial legacy.
What Is a Financial Legacy?
A financial legacy is something of worth that you pass along to beneficiaries such as relatives or charities. It could be the money in your retirement account, your primary home, a beach house, a business, or assets like precious metals.
A survey commissioned in 2020 by Ethos, a life insurance provider, found that 82 percent of Americans believe it’s essential to leave a strong financial legacy. However, 38 percent of those surveyed doubt their ability to do so.
“A strong financial legacy is when a person leaves behind a positive financial situation for their loved ones when the person dies. This can include retirement savings accounts, wills, and life insurance, among other savings options,” Peter Colis, co-founder and CEO of Ethos, says in an article published by Forbes.
To leave a financial legacy, you must first build wealth through your financial and retirement planning. Creating a will or trust can help ensure that the financial legacy you envision today becomes a reality after you’re gone.
There are a variety of options for building wealth, such as:
- establishing a long-term source of income such as a job with a company or self-employment;
- taking side jobs to supplement your income;
- setting up a workplace retirement account, such as a 401(k);
- buying real estate, either as a primary residence or as an income property;
- purchasing tangible assets like gold, silver, platinum, and palladium;
- placing money in a high-yield savings account;
- cutting costs so your wealth doesn’t dwindle;
- eliminating debt, especially high-interest credit card debt;
- establishing and sticking to a household budget;
- coupling legacy-planning strategies with tax-planning strategies; and
- regularly reviewing your financial and retirement plans with a trusted advisor.
Keep in mind that developing your financial legacy also involves teaching your children, especially those in their teens, how to manage money properly.
“The first step in securing your financial legacy is understanding that no matter what, you need to build it. Regardless of your financial status or wealth, the circumstances you leave behind can have an impact on your dependents, potentially for generations,” writes Colis.
What Are the Benefits of Leaving a Financial Legacy?
The benefits of leaving a financial legacy are numerous. If done correctly, establishing your financial legacy can mean:
- Your children can pay for higher education without taking out student loans.
- Your spouse can keep a roof over their head and live comfortably without financial stress.
- Students at your alma mater may receive scholarships from a fund established in your name.
- Your favorite charity could undertake a much-needed project or expansion.
- Your family’s generational homestead will remain in the family for another generation.
Leaving a financial legacy can create these and many other opportunities—but only if you’re committed to building and maintaining that legacy. What possibilities come to mind for you?
You can leave a financial legacy with a portfolio of any size. Contact U.S. Money Reserve to learn about increasing your financial legacy with a precious metals IRA.