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How To Leave A Meaningful Financial Legacy

Six steps to leaving a lasting and meaningful financial legacy after your retirement and beyond.


You can’t take your money with you when you gobut with good financial planning, assisted by a trusted advisor, you can leave a legacy of wealth and wealth creation for your family and loved ones. Here’s how to do it:  


  1. Plan ahead

We can’t say it often enough: when it comes to building a long-lasting financial legacy, careful planning is the only way to ensure success. Retirement planning is an important part of this, but as Group Commercial Director, Anthony Palmer emphasised, retirement planning is simply not enough. 

“There are several other questions to consider,” he said. “Did you know that generally your pension should be enough to pay you 75% of the income you had been receiving while employment, during retirement? Global statistics tell us that less than 5% of people who retire can actually afford to do so and consequently are unable to maintain a lifestyle they are accustomed to or had hoped for in retirement” 

What’s more, if you only save for retirement, and don’t cover your income with insurances, you run the risk of having to “eat” into your retirement pot due to unforeseen circumstances. 


  1. Have an updated will

An important aspect of your financial legacy is making sure you have an updated will. “A will allows you to specify who you want to benefit from your estate and in what proportion,” explains Abigail Reynolds, Admitted Attorney at Carrick Consult. “If you don’t have a will you have no control over this. Some people you care a lot for could get less than you wanted, and some people could benefit that you didn’t want to leave anything to at all.” More importantly, she adds, a will helps clarify your final wishes and avoids family quarrels. 

Your will can also deal with your offshore assets. Carrick’s advisors can assist you in determining whether you should do that within your South African will, or whether you have separate wills for each country outside of South Africa in which you hold assets. 


  1. Grow your wealth… and preserve it

Securing your financial legacy is as much about building wealth as it is about preserving wealth. After all, the less you lose, the more you’ll gain in the long run. A well-rounded investment strategy will include a variety of diversified assets, that hedge against inflation while allowing for optimal long-term growth. This is where a trusted, experienced financial advisor is invaluable: they will partner with you to help ensure wealth creation and wealth preservation in your portfolio, and to put risk management at the centre of your wealth preservation strategy. 


  1. Avoid debt

Few things kill your wealth legacy as quickly or as decisively as debt. “I’m sure everyone is familiar with the term ‘debt trap’,” says Anthony Palmer, Carrick Wealth Group Commercial Director. “It is a significant problem for millions of South Africans. Once you’re caught in debt, it’s extremely hard to free yourself from its relentless hold.” Palmer recommends examining your various debt obligations, your monthly payments and the interest rate on each; and building a payment plan get out of that debt. “Make it your sole priority to avoid new, unnecessary debt,” he adds. “We all want to treat ourselves every now and then, but you’ll regret excessive expenses later.” 


  1. Cover your life

Like your will, your life insurance is a crucial part of your financial legacy. “Most people think that because they have a life insurance policy, their beneficiaries are covered,” warns Carrick Wealth CEO Craig Featherby. “But not all life insurance policies are the same and understanding how to select one that suits your situation best is complex. Reviewing your beneficiary designations and regularly updating your policies should form part of your overall estate planning.” 

Ensure you’re adequately covered with a life insurance policy that pays for “final expenses” like medical and funeral costs, that maintains your family’s lifestyle and that supports your children’s education. Importantly, make sure that any debt is also covered. After all, leaving a debt for your family to repay is the worst kind of financial legacy. 


  1. Pass on good habits

Finally, understand that your legacy doesn’t only have to be about money or assets. Passing on good habits can be just as important. Self-made billionaires Warren Buffett and Bill Gates have both made it clear that their children won’t inherit much of their stratospheric fortunes. In 2011 Gates confirmed that his three children would inherit “a miniscule portion” of his estimated $81 billion wealth. As he said at the time, “It will mean they have to find their own way.” 

Passing good, wealth-building habits on to your children is an intangible yet invaluable part of your financial legacy. A legacy of saving, investing, wealth preservation, debt avoidance and responsible spending will go a long way to ensuring that your wealth legacy truly lasts, and doesn’t end with the next generation. 

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