Will I have enough money to leave for my family?
As you approach retirement, it’s normal to think about whether you’ll be able to leave something for your loved ones.
Providing financial security for our children or grandchildren is an important and meaningful goal for millions of Americans. However, rising living costs, healthcare expenses, and an unpredictable economy can leave us feeling less-than-confident about our ability to leave a financial legacy.
Let’s explore how to balance your own retirement needs with your desire to leave something for the people you love. We’ll also talk about practical ways to maximize what you can pass on to your loved ones to leave a legacy that’s about more than money.
How our ideas around inheritance have changed
On average people in the US live around 6.5 years longer than they did just 50 years ago. While that’s fantastic news, it means that the factors can have always chipped away at people’s retirement savings—inflation, unexpected financial emergencies, increasing healthcare expenses, long-term care etc.—loom larger than before.
By the time all these costs are accounted for, many nearing retirement are concerned that there won’t be much left for their family. If you can relate, you’re certainly not alone.
It’s important to prioritize your financial security first
Whenever we get on a flight, we’re told to put on our own oxygen mask before helping anyone else around us, should the cabin lose pressure. Why? Because we can’t help anyone if we’re unconscious. In the same way, it’s essential to focus on your own financial well-being before you can worry about leaving an inheritance. If you don’t have enough to cover your own needs, you might end up relying on your children for financial support , which would have the opposite effect of what you intended.
To avoid this, create a realistic retirement budget that accounts for all potential expenses, including healthcare, housing, and leisure activities. This way, you’ll have a clear picture of how much money you need to comfortably cover your own expenses. Once you have a workable plan for your financial future, you can determine what you’re able to leave as an inheritance.
Working with a financial advisor can help you assess your savings, investments, and income sources, better preparing you for whatever financial challenges retirement may bring.
Working together, you may find that adjusting your spending or delaying retirement by a few years could give you the flexibility to leave something for your family without compromising your lifestyle.
Once you have a workable plan for your financial future, you can determine what you're able to leave as an inheritance.
Maximizing what you can leave behind
Instead of worrying about how much you may or may not be able to leave to your family, there are strategies you can use to maximize whatever you can pass on. One key step is ensuring that any inheritance isn’t reduced unnecessarily by
Review your beneficiary designations
Start by reviewing your beneficiary designations on retirement accounts, insurance policies, and investment accounts. These accounts pass directly to your heirs without going through probate, ensuring a smoother and more cost-effective transfer of assets.
Create and maintain your estate plan
Next, make sure to create and routinely update your estate plan. A well-structured estate plan can help ensure that your assets are distributed according to your wishes while minimizing costs left for your heirs. Consider using a revocable living trust, which helps your estate avoid probate—a legal process that can be expensive and time-consuming. By avoiding probate, more of your money will go directly to your heirs rather than being tied up in fees or court costs.
Convert traditional retirement accounts
You might also consider converting traditional retirement accounts, such as 401(k)s or IRAs, into Roth IRAs. While you’ll pay taxes on the conversion now, Roth IRAs allow your heirs to withdraw money tax-free, maximizing the amount they receive.
Consider lifetime gifting
Another strategy is lifetime gifting, where you give smaller amounts of money to your heirs while you’re still alive. By doing this, you can take advantage of the annual gift tax exclusion (currently $19,000 per person in 2025) and reduce the size of your estate without incurring gift taxes. What's more, you get to witness how this untaxed financial gift helps your loved ones in your own lifetime.
Leaving a legacy, even if it's not financial
After creating a budget and speaking with a financial advisor, you may find that leaving a significant inheritance isn’t likely. While that can be discouraging, it's important to remember that there are still ways to leave something meaningful behind: a non-financial legacy.
A legacy letter, for example, allows you to share your life lessons, values, and hopes for the future with your children and grandchildren. You can pass down family traditions, stories, or experiences that will continue to influence your loved ones long after you're gone.
Worrying about leaving enough money for your family is natural, but it's important to remember that your legacy isn't just about the dollar amount. While financial gifts can provide security, your memory, wisdom, and love are invaluable to your family.
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This material is for informational or educational purposes only and is not fiduciary investment advice, or a securities, investment strategy, or insurance product recommendation. This material does not consider an individual’s own objectives or circumstances which should be the basis of any investment decision.
Investment products may be subject to market and other risk factors. See the applicable product literature or visit TIAA.org for details.
Retirement check refers to the annuity income received in retirement. Guarantees of fixed monthly payments are only associated with TIAA's fixed annuities.
Investment decisions should be made based on the investor's own objectives and circumstances. Advice is obtained using an advice methodology from an independent third-party.
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