Joe Lucey

A legacy letter is a way to express your values, blessings, life’s lessons, love, apologies and even forgiveness with family and friends — shared either while you’re still alive or to accompany your will upon your death. It is not a legal document, and it should not provide instructions for distribution of your material wealth, but it is a lasting and memorable way to say goodbye to loved ones.

It can be tough to figure out how to start a legacy letter, so consider a simple mission statement such as, “I am writing this letter to share what I’ve learned about our family, what is important to me and wishes for your future.” Try to imagine your loved ones’ lives once you are gone — what challenges and joys they may face — and share the thoughts you would have if you were there with them.

You can start your legacy letter with either an outline of topics you want to cover, or just free-form writing (you can edit and organize later). You may even want to ask your family what they’d like in it; they may surprise you. They may want to read stories about your childhood, your parents and relatives that they may have never met and other memories that can be passed down to future generations. Consider including places you’ve been or opinions you may have never expressed about politics, religion or other controversial subjects that are important to you.

Don’t worry about being a great writer. Just express your thoughts as if you are having a conversation. If you teeter back and forth on thoughts, or go off topic and then back again, these are likely characteristics that will fondly remind your loved ones of you. You can even write a separate legacy letter for specific people in your life.

Above all, remember that it’s your legacy letter, so it’s your chance to say things you may have never found the right time to say before. Even if you don’t think your children or grandchildren will be interested in it now, know that once you’re gone, your words will linger as treasured memories.

It’s been a year of unconventional politics, yet the investment markets have held strong. Despite the occasional blip in reaction to a political event, investors who have stayed the course have, for the most part, recovered. However, the markets have experienced an unusually long bull run, leading some analysts to consider a correction — a 10 percent drop from recent highs — on the horizon. Retirees and those on the cusp of retirement should consider their current investment risk and have a potential fallback plan in the event that market losses impact their retirement income.

• One common bit of advice is to make sure your basic living expenses are covered. This means ensuring you have enough Social Security and pension income to cover housing, food and other essential expenses. If you do not, you may want to consider using a portion of your retirement assets to purchase an annuity that guarantees* a minimum level of income to help cover the balance. Expenses such as entertainment, travel and gifts can always be scaled back after a market decline to adjust for any loss of discretionary income.

• Another strategy is to keep a store of cash, not just for emergencies but also to help cover income losses due to a market correction. In this scenario, an individual can use his cash to cover living expenses to give his portfolio time to recover, rather than selling securities for a loss just to make ends meet.

• For individuals using their investments to generate income to help fund retirement, it’s important to stay on top of your allocation mix and consider making adjustments as needed due to market conditions.

• Finally, if a retiree’s portfolio takes a market hit, he or she may consider looking for other temporary sources of income rather than cashing out investments. Options may include taking a part-time job, renting out a vacation home or selling a spare car or other high-ticket item.

IRS Rules for Claiming Investment Loss

When an investment is sold for a loss, the difference between the price the investor originally paid and the amount he or she sold it for is referred to as a capital loss. A taxpayer may be able to deduct this amount from his or her income taxes in the year he or she sold the asset, per the following IRS rules:

• When the amount of investment capital losses exceeds an investor’s total capital gains, he or she can usually claim the amount of the excess loss as a deduction on his or her income tax return — up to $3,000 ($1,500 if married filing separately).
• When net capital losses exceed this limit, they may be carried forward to later years.

Capital gains and losses are classified as long- or short-term, depending on how long the investor held the asset before he or she sold it. If held more than one year, the capital gain or loss is long-term. If held one year or less, it is considered short-term.

 

The content provided here is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice. Contact us at info@securedretirements.com or call us at (952) 460­-3260 to schedule a time to discuss your financial situation and the potential role of investments in your financial strategy.

Loss comes in many forms: Our children grow up and move out, friends retire and move away and loved ones pass on. The longer each of us lives, the more people we may lose in our lifetime. It’s also possible that one reason the “graying divorce” rate has increased in recent years is because longer life expectancies offer the potential to build a new life after divorce.

We lose other things, like our keys and maybe our short-term memory. We may lose our good health or even our teeth. We lose a little bit of our nest egg gradually as we withdraw it as income during retirement.

However, loss is not unique to retirees. We experience losses throughout life and generally find ways to cope and move on. Growing older is no different. You’ve probably heard the adage that you can’t control all the things that happen in life — only your response to them. So instead of focusing on the things you lose as you age, perhaps respond by embracing the things you gain.

These things may include your home and your family. Wisdom and knowledge. An understanding of what’s truly important to you in life. Decades of wonderful moments and memories.

Loss is an inherent and inevitable part of life. But life is just that: living. You get another day; another opportunity to live. Dealing with loss is important, but its purpose is to help you move on and embrace what each new day can bring.