One of the most common concerns I hear from clients is: “How do I enjoy my retirement fully without compromising what I hope to leave behind?” This question reflects the delicate balance between living well today and preserving wealth for tomorrow.
As a Chartered Retirement Planning Counselor (CRPC®), I’ve helped many families navigate this balance. The good news? With proper planning, you don’t have to choose between a fulfilling retirement and a meaningful legacy.
The Retirement-Legacy Tension
The tension between spending for today’s enjoyment and preserving assets for tomorrow’s legacy is natural. You’ve worked hard to build your wealth—shouldn’t you enjoy it? Yet many retirees also feel a deep responsibility to leave something meaningful behind.
This tension often manifests in questions like:
- “Am I spending too much now at the expense of what I’ll leave behind?”
- “Should I forego certain retirement experiences to preserve my estate?”
- “How do I know if I’m being too conservative or too extravagant?”
These questions reflect not just financial considerations, but deeply held values about family, generosity, and purpose.
Finding Your Personal Balance
There is no one-size-fits-all answer to these questions. However, I can share some principles that have helped many clients find their own equilibrium.
Start With Clarity About Your Priorities
Take time to reflect on what matters most to you:
- What retirement experiences are truly important? Which could you live without?
- What legacy goals are non-negotiable? Which are “nice to have”?
- How do you define “enough” both for yourself and for your heirs?
Creating “Must-Haves” and “Nice-to-Haves” lists for both retirement lifestyle and legacy goals often brings remarkable clarity.
Create a Sustainable Spending Strategy
With priorities established, we can design a spending approach that balances current enjoyment with future preservation:
- The Bucket Approach: Allocate assets into immediate needs (1-3 years), medium-term needs (4-10 years), and long-term/legacy assets (10+ years).
Fun Fact: This is also great for managing short term market volatility! - The Essential vs. Discretionary Budget: Separate your retirement budget into essential expenses (housing, healthcare, food) and discretionary spending (travel, hobbies), adjusting the latter based on market conditions.
Leverage Strategic Wealth Transfer During Life
Many clients find satisfaction in beginning their legacy giving during retirement:
- Annual Gifting: Using the annual gift tax exclusion ($18,000 per recipient in 2025) allows you to witness the impact of your generosity.
- Educational Support: Contributing to 529 plans for grandchildren provides tax-advantaged education funding and potential legacy impact.
- Charitable Strategies: Donor-advised funds, qualified charitable distributions from IRAs, or charitable gift annuities can provide current tax benefits while supporting causes you care about.
These lifetime giving strategies often create more value than waiting until after your passing.
Consider Your Asset Location Strategy
The specific accounts from which you draw retirement income can significantly impact your legacy goals:
- Tax-Deferred Accounts (Traditional IRAs, 401(k)s) face required minimum distributions and potential heavy taxation for heirs.
- Tax-Free Accounts (Roth IRAs) can provide both tax-free income in retirement and valuable tax-free inheritance for beneficiaries.
By strategically drawing from different account types and potentially converting some assets in lower-income years, you can enhance both retirement income and legacy efficiency.
Real-Life Balance: A Case Study
A couple, ages 62 & 63, came to us about 6 months before retirement, with a goal to leave a certain amount for each of their three children, as well as for their two favorite charities. Through our planning process, they:
- Identified core priorities: Travel, supporting grandchildren’s education, and leaving a charitable legacy were non-negotiable.
- Created a sustainable spending plan: We established base income from guaranteed sources and conservative portfolio withdrawals, with additional discretionary spending in strong market years.
- Began lifetime giving: They funded 529 plans for grandchildren, made annual exclusion gifts to children, and established a donor-advised fund.
- Enhanced asset location: We strategically converted some Traditional IRA assets to Roth during early retirement years when their income and tax bracket were lower.
The result? They’re currently enjoying extensive travel, get to witness the impact of their educational gifts, engaged with their charitable interests, and maintained confidence that their legacy goals remain on track—true balance achieved.
Taking the Next Step
Of course, the couple above have their own unique financial circumstances that allowed them to meet these goals. However, if you’re wrestling with this balance, start by clarifying your most important priorities in both areas. Once these are clear, we can develop specific financial strategies that honor both your retirement dreams and your legacy aspirations.
Remember, this isn’t about choosing between today and tomorrow—it’s about finding the unique balance that gives you confidence in your investments while living your values across all dimensions of your financial life.
