Spend Your Children’s Inheritance — and Still Leave a Legacy
By James Shiver, DBA, AFC®
In nearly three decades in life insurance and financial services, I’ve had the opportunity to work with thousands of families. And while every family’s situation is different, one concern seems to be a recurring theme.
Many parents want to enjoy their retirement while also leaving a legacy for their children.
It’s a common dilemma. Many people spend decades saving for retirement, often sacrificing along the way, not just for their own security but also for the possibility of helping their children and grandchildren. But this can sometimes create a necessary pressure in retirement.
Essentially, couples may hesitate to travel, put off home improvements, or avoid spending on experiences they would enjoy—all because they are worried about reducing the inheritance they leave for their children someday.
In other words, they are protecting their children’s future at the expense of enjoying their own retirement.
From a retirement planning perspective, this raises an important question: What if retirees didn’t have to choose between enjoying retirement and leaving a legacy?
One time-tested strategy that can help to address this concern involves using life insurance for legacy planning. In simple terms, life insurance can allow retirees to spend savings while still providing an inheritance for their family.
I sometimes explain the concept this way: life insurance can replace the inheritance that might otherwise come from retirement savings.
Consider a simple scenario. A couple is retiring with a $1 million nest egg. They have saved throughout their lives and want to ensure that a portion of the money goes to their children. Based on this, they limit their spending, worried that every vacation or major purchase may reduce what they leave behind.
Now, suppose that part of their financial plan includes a life insurance policy specifically designed to provide a legacy for their heirs. That policy’s death benefit can act as an inheritance, allowing the couple to use retirement savings for what it was originally intended—their own life and experiences.
Clients hearing this idea for the first time often feel a sense of relief.
I sometimes phrase it in a way that tends to resonate:
“You can spend your children’s inheritance—and still leave a legacy.”
Of course, like any financial plan, this strategy requires thoughtful planning and implementation. Considerations such as age, health, lifestyle, savings, and overall financial plan can help determine whether life insurance is an appropriate solution. The intent isn’t to promote a product, but to introduce a planning concept that may help reduce anxiety about spending in retirement.
Interestingly, when discussing this idea with adult children, many say that they would much rather see their parents enjoying retirement—traveling, spending time with family, and living comfortably—than worrying about their future inheritance.
In the end, retirement planning isn’t simply about numbers on a financial statement. It’s about aligning financial decisions with what matters most: family, freedom, and peace of mind.
Sometimes the greatest gift parents can give their children isn’t simply an inheritance.
It’s the example of a life well lived.
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