Financial Legacy Report

Thank you for taking time to visit Annuity Digest.  The information on this page is intended to help you better understand the financial legacy results that were sent to you in email.

This page contains the following information:

Explanation of Results

The dollar figure you received in your email is the amount you may expect to leave to your heirs as a financial legacy.  In other words, this is the amount you may expect to leave as an inheritance.

The amount shown is based on the information you provided and is expressed in current or “today’s” dollars--not as a projected or future value.

Why Is this Important?

Having some notion of what you could pass along to heirs as an inheritance is interesting information.

However, the most important thing to understand is that there is a fundamental trade-off between the viability or “sustainability” of your desired retirement spending and your desired financial legacy:

  • A higher financial legacy results in lower retirement sustainability.
  • A lower financial legacy results in higher retirement sustainability.

What does this mean in plain English?  The more you want to pass along to your heirs, the less you have to support your own retirement income needs.

Retirement sustainability refers to the likelihood that your nest egg or retirement savings will support your desired retirement spending needs over the course of your expected lifetime.  A high level of retirement sustainability is a good thing--you want to avoid running-out of money during retirement.   

Again, the basic trade-off means that:

  1. Higher financial legacy = lower retirement sustainability.
  2. Lower financial legacy = higher retirement sustainability.

What Can You Do with this Information?

There are a number of factors that impact the trade-off between financial legacy and retirement sustainability.

You are in control of many of these factors.  For example, you have control over each of the following potential decisions:

  1. Decrease Retirement Spending Expectations: Lower spending equates to a higher financial legacy.
  2. Decrease Financial Legacy Expectations: You may want to spend more or simply ensure that you have enough money in retirement by decreasing the amount you would expect to provide as a financial legacy.
  3. Increase Your Savings: The amount of your retirement savings or “nest egg” has a direct impact on your financial legacy result. All things being equal, more savings results in a higher financial legacy.
  4. Assess Your Asset Allocation: Asset allocation or how your nest egg is divided between stocks and bonds can affect your level of sustainable retirement spending.  Your results assumed a 50/50 split between stocks and bonds.  Changing your asset allocation can impact both retirement sustainability and financial legacy.
  5. Assess Your Product Allocation: The amount of retirement income that comes from guaranteed sources such as annuities can affect your financial legacy and retirement sustainability.  More guaranteed, annuity-like income results in a lower financial legacy but a higher level of retirement income security or sustainability.

Some Additional Things for You to Consider

  • What-if Scenarios: The calculator that generated your results can be used to create “what-if” scenarios that illustrate the effects of your potential decisions (such as those described above) on financial legacy and retirement sustainability.
  • Talk to a Financial Advisor: The best way to explore these what-if scenarios is through a live conversation with a financial advisor. Click here to talk to a financial advisor.