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Mining Your Golden Years

In an ideal world, we’d all be able to reach a certain age and just stop working if we so choose, enjoying the fruits of our many years of labor while we pursued other interests. Unfortunately, however, we don’t live in an ideal world; and the reality of it is that unless we actually actively plan for the future, our so-called “golden years” might not be quite as golden as we’d hoped.

So how do you plan for a future of financial security? Learn to love the three L’s: Lifetime Income, Liquidity, and Legacy.

Lifetime Income

First up is Lifetime Income, which refers to the money that will essentially have to last for the rest of your days. This money is comprised of Social Security payments you’ve made throughout the years as well as any pension benefits you many have coming your way. In some cases, the sum adds up to enough that you’ve met that goal of having the funds to keep life running along smoothly for the years ahead; but for those whose numbers fall a bit shy, you’ll need to plan effective ways of increasing the money you’ve secured so that you may still live comfortably after retirement.


Next comes Liquidity, which refers to any financial resources you have that could easily be converted into cash in the event that you have expenses that exceed those covered by your Lifetime Income. Bank accounts, home equity, and Roth IRAs would all be considered liquid assets; and when substantial costs like unreimbursed medical care or unforeseen expenditures hit, these are the funds that will keep you well cushioned.

Legacy is money that can come from a number of sources, such as liquid assets that are unused during your lifetime or a financial asset such as an insurance policy that is specifically dedicated to become an inheritance. Stocks and bonds other than your rollover IRA or a 401(k) are ideal for this because they receive a more favorable tax treatment after your death; and any investment risks are assumed by your heirs rather than having to be your responsibility. Of the three L’s, legacy is last in its importance as it is far more essential to ensure that you and your spouse are taken care of financially before you consider the need for leaving an inheritance for your children.

“Our goal at Dowdy Financial is to look at the whole picture in retirement and not just at the investments a client may have,” says financial advisor Ladonna Dowdy of Dowdy Financial Group in Clarksville. “There are other factors to consider; so we go over healthcare costs, living expenses, what our clients want to leave as a legacy, and anything else about which they may have a concern. It’s important to remember that retiring is more than just investments.”

Regardless of your age or your current financial state, it’s never too late—or too early—to form and implement a game plan for setting up your life in retirement. And once you understand the importance of Lifetime Income, Liquidity and Legacy, you’ll be better able to develop a logical plan and determine your next steps to mining your own golden years.

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