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July 30, 2024 at 10:57 AM
What You Need to Know
- Many wealthy people choose to pass on wealth why they die, but that's not the only way.
- Experts say passing on assets during one’s lifetime can have big benefits, both psychological and practical.
- Beyond alleviating financial stress, early inheritance can provide a test run for future big gifts.
It’s not very often that a tweet about retirement income planning goes viral, but that’s exactly what happened to a recent post on the social media platform X by Adam Harding, a financial advisor and founder of Harding Wealth in Tempe, Arizona.
The post tells of a recent meeting in which Harding sat down with a client who is 73 and in good health. She has two kids, ages 42 and 47, along with one 13-year-old grandson.
Importantly, Harding wrote, the client has “plenty of money” for a comfortable retirement, while the next generation in the family is facing some degree of financial strain in meeting daily expenses and savings goals.
“The conversation was mostly focused on estate planning and encouraging her to feel okay giving money to her adult kids,” Harding recounted in the post, which has amassed more than 10 million views and several thousand comments.
But the big concern from the client turned out to be more about the timing of such gifts: Is it somehow wrong or inappropriate to give money to the next generation today rather than doing the traditional thing and waiting for the end of life? Could such gifts somehow negatively affect the relationship across the generations?
Harding’s response to this client’s concerns was to use the power of visualization to extoll some of the underappreciated virtues of legacy giving with a “warm hand.”
“Here’s what I said to her,” Harding wrote. “Think about life 20 years from now. You’re 93… Your kids are in their 60s and your grandson is 33. Then they’ll inherit your money. However, at that time everyone is fairly settled into who they are and what they’ll become.”
Harding then compared that outcome with the decision to give a gift today.
“Your kids are at a place in their lives where a financial gift can have a trajectory-altering impact,” Harding wrote. “Consider the ripple effects of removing a bit of financial stress from the parents of a 13 year old. I’ll help ensure your needs are met for the rest of your life, but if you see an opportunity to help the people who matter to you, seize it.”
A number of retirement planning experts asked by ThinkAdvisor to assess the post said they fully agreed with Harding’s take, and they said they weren’t necessarily surprised to see just how much the discussion has resonated with the public.
Many of a given advisor’s clients are likely asking themselves similar questions about the best ways to enact their legacy giving goals, they noted, and so its important for financial professionals to raise what can be an uncomfortable topic. Doing so can help clients experience the joys of giving while they are around to see the impact.
Seeing the Impact Brings Added Joy
The extensive sharing and discussion of Harding’s X post came as no surprise to Tamiko Toland, the co-founder of IncomePath and former TIAA executive.
“This type of a discussion and goal-setting is actually at the heart of the IncomePath ethos,” Toland said. “Part of our process is helping clients understand how to handle any surplus wealth they might have as they manage their retirement — and legacy giving is usually a big part of that discussion.”
