February 24


Do You Want To Be Remembered As Generous?

How much money is going to pass to heirs in the next 30 years?  According to Time magazine, the number could reach over $30 trillion.  Yes, that is $30,000,000,000,000. (source)

Today I am going to offer an alternative to leaving money to your kids. One that allows you to live the retirement you deserve while giving your heirs an even better inheritance.

Whenever I create long-term spending plans for my clients, I often hear, “But Dave, I understand you want us to start spending some money as soon as we retire, but we don’t NEED the money. We don’t even know what to do with it. We’ve learned to live frugally over the past forty years. We really don’t need anything else.”

“It’s awesome that you’ve built up those habits,” I’ll usually reply. “That is a big part of why you are in the position that you are in. But if you don’t use your money, someone else will. Maybe the government, maybe your heirs, but you need to seriously think about what this money is FOR.”

No one will ever be as good a steward of your savings as you. Let me say that again for maximum impact:  No one will ever be as good a steward of your savings as YOU. 

You’ve worked for it, you’ve earned it, you appreciate it. You have a more intimate connection to your money than anyone else ever could.

You hear about it all the time. Kids inherit their parent’s money and it causes discord. They waste it. They fight with their siblings. They don’t treat it with the same care and respect as their parents did.

Athletes sign huge contracts, oftentimes straight out of school.  They blow through the money because they weren’t prepared for it.

Many lottery winners say that winning the jackpot was one of the worst things that has ever happened to them. They don’t know how to steward the money because they didn’t earn it.

Of course, you need to do the appropriate planning to ensure you don’t outspend your savings, but once you make sure you are not mortgaging your future, you get to start determining how you want to spend the money, right now.

I want to be very clear.  I am not asking you to become materialistic.  I am merely suggesting that you start living your life with a renewed sense of opportunity.

Which brings me back to your kids and loved ones.  As opposed to leaving them a large lump sum of money at your death, I think there’s a better way.

Give them a little bit each month now. Or put another way, dole out their inheritance a little bit at a time for the next 20 or 30 years.

Of course, we don’t want to enable our children and loved ones— you will have to make that determination.

I’ve noticed giving them specific things, instead of cash money works well (you replace their old car, you start a college fund for grandkids, you help with a down payment, pay rent for a few months for a desperate friend, you help with college loans, you send your grandson to summer camp, etc.).

But members of the Retirement Revolution already know that they are going to spend 5% of their retirement savings each year, starting the first year of their retirement. Some of that money could go to your kids and loved ones now.

The benefits are numerous.

Benefit #1: Your kids are in their 20’s to 40’s right now, which are the most complicated and difficult times in somebody’s financial life. They are having children.They are buying homes.They are starting careers. This is when they need the money. By the time you’re gone, your kids will be in their 60’s and 70’s.

Benefit #2: You are able to see your kids and loved ones actually use and appreciate the money. You get to attend your granddaughter’s piano recital (you paid for the lessons). You get to see the relief on your son’s face when he realizes they are able to replace the car that keeps breaking down.

Benefit #3: You are able to see how your kids and loved ones treat the money. Are they responsible with it? Are they making good financial decisions?  Better yet, you can mentor and guide them on how to better manage their assets. And if they blow your cash?

Well, it’s certainly better you know now.

Benefit #4:  It is tax efficient. Taking out a little money from your retirement accounts each month stretches out the tax liability. It is much better to take a little bit of money out each month versus large lump sums here and there.

While heirs are able to utilize a “stretch IRA,” which can spread out their tax liability over several years, often times I see IRAs cashed out completely.  A $500,000 IRA which is cashed out by your heir, could result in over $150,000 in taxation. (source)

Mega Benefit #5:  You are teaching your kids and loved ones an incredible lesson about generosity. This might be the most powerful benefit of this strategy. Your kids get to see, firsthand, that Mom and Dad are not materialistic, nor are Mom and Dad overly stingy. Mom and Dad place value on what really IS valuable. Relationships. Family. Love and kindness.

If your kids and loved ones see your generosity, they will grow to be generous themselves. Your legacy will last for generations.

Be Blessed,



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