You don’t need to be a millionaire to leave a meaningful legacy to your loved ones. Here, how to begin thinking of your legacy, and how to begin building it now, in both monetary and value-based ways
My 3-year-old daughter has just started to understand the concept of memory, and as a result, nearly every third sentence begins with, “Remember?” as she recites a detail about something she and I shared. As she asks if I remember the dark rollercoaster ride we took in December, the ducks that stole our potato chips in April, and the birthday party I threw for her just last week, I can’t help but wonder, “How will she remember me?”
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Why think about a legacy now?
My question sounds morbid, but as a mom who lost her own mother, I’m all too aware that life isn’t permanent. Because of my history, I’ve been proactive about my finances. I have life insurance and a will, and I make sure that no matter what the future may bring, my daughter will be provided for.
While finances are an important piece of the legacy puzzle, intangibles are just as important — the memories, experiences, and values. A legacy should include financial and emotional components so that your loved ones can take comfort in both the assets you leave behind and the values you pass down.
Here is a primer on how you can leave a legacy for your loved ones.
Take control of your finances (if you haven’t already)
We all know kids are expensive. Whether you’re expecting your first child or your youngest, managing the budget for a growing family can be tough. According to a recent survey, 53% of millennial parents have less than $5,000 in savings.
It’s tough to save, but don’t stick your head in the sand when it comes to finances. Know what you have, including retirement accounts and investments, and what you owe, including student loans or other debt. Knowledge can help you choose a savings strategy as you figure out what’s going well and what areas may need more attention.
Create a worst-case-scenario plan
If you or your partner were to die unexpectedly, how will you provide for your children?
‘What if’ scenarios may not be pleasant to ponder, but you’ve got to if you want to create a realistic contingency plan to protect and provide for your family.
Life insurance is part of that contingency plan.
The lump sum proceeds from a life insurance policy‘s death benefit can help your loved ones pay for day-to-day expenses, childcare, future education costs and more. The peace of mind you’ll gain from having a policy may be more affordable than you think, especially as you hit your thirties and may be thinking about starting a family or leaving a legacy for future generations.
For example, a 20-year, $500,000 Haven Term policy, issued by MassMutual or its subsidiary C.M. Life, for a healthy 30-year-old woman costs about $15 per month. That’s less than your online TV streaming service or two acai bowls for lunch. A 36-year-old man in excellent health can buy a 20-year, $750,000 term life insurance policy for as little as $30 per month. Your rates will depend on a range of factors including your age and your overall health.
If you’re curious to know how much (or little) your premiums might be, you can get a free life insurance quote online.
Plan for your own future
Of course, you want to give your children everything. One of the smartest ways to provide a long-term financial legacy for them after you’re gone is to put a robust retirement savings strategy in place.
Helping with your children’s education is an admirable goal, but there are no loans for retirement. If you don’t have a financial plan for your future in place, your children may have to provide for you one day. One of the greatest gifts you can give your children is freedom from a future financial burden.
Look through your employer’s IRA or 401(k) offerings, if applicable. Consider contributing at least enough to get the full match if one is offered.
You can also set up your own IRA, either traditional (tax-deferred) or Roth (taxed now).
A healthy retirement portfolio provides two benefits: (1) your ability to draw upon the funds in your portfolio for your financial needs in retirement, and (2) if your children are the beneficiaries, the funds in your portfolio will transfer to them if you pass away before using them. Working with a financial planner can help to find the best path for you.
Create a will
Everyone needs a will, but especially parents. Not only can a will designate the guardian you want to take care of your children, but your will also opens up the door to a valuable conversation with your loved ones. When you put your cards on the table, you’ll eliminate confusion and clarify what things have value to you.
The monetary values of the items in your will are irrelevant. When you leave a vinyl record collection, prized guitar, or collection of journals to a child you make clear how much you honor that person and trust him or her with the things you hold most dear.
Build a legacy with charitable gifts
While drafting your will, you may wish to consider charitable causes to whom you may want to bequeath assets. Although you may not have the means for donations now, legacy gifts are appreciated enormously and keep your name alive far beyond your lifetime.
Naming charities in your will can also help family and friends know where to donate in your name to honor you. My mother was the president of the senior center in our town, and before her death, she asked for donations to the center instead of condolence flowers. I love knowing that her memory lives on in a space that was so important to her, and whenever I drive by the building, I feel connected to her in a small way.
If you’re interested in leaving a charitable gift, find out how to donate assets after your death to a charity, educational institution, or nonprofit and have the conversation now with your loved ones. Be clear about your intentions and get them in your will now.
Build a legacy of values
Your legacy isn’t necessarily the money left to others. It’s the lessons you taught, the memories others have of you, and the life you lived.
My mother’s legacy was her commitment to others, her love of adventure, her belief that life should be fun. When the weather is beautiful if I take the day off from work, sign my daughter out of daycare, and take a spur-of-the-moment trip to the beach, I’m living my mother’s legacy. I even tell my daughter how much her Grandma Gail would have loved this day.
I hope these memories take hold in my daughter’s mind. For me, creating this intangible legacy is essential, so I prioritize family time as much as possible.
I would much rather take the day off and go to the beach than focus on financial to-dos, especially when I fervently hope that a will or a beneficiary for my IRA won’t be necessary for decades. But I know that if I get these things done now, I can truly enjoy my time with my daughter.
A huge consolation in my mom’s death was that all her paperwork was in order. As my family and I coped with our grief and tried to imagine a future without her in it, we were unburdened by financial confusion or in-fighting over “things.”
I want the same for my daughter. I am building my own legacy to ensure that I can give her that same emotional and financial freedom.
About Anna Davies
Anna Davies is an innovative copywriter, magazine editor, award-winning essayist. She has written for The New York Times, New York Magazine, Refinery29, Glamour, Elle, and others, and has published 13 young adult novels. She lives in Jersey City, NJ, with her family and loves traveling, running, and trying to find the best cold brew coffee in town.
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Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.
Our editorial policy
Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.
Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.
Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.
Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.
MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.
Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit: https://havenlife.com/plus
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