The Long Game of Generosity
By Vaughn Woods, CFP, MBA
“Society grows great when old men plant trees whose shade they know they shall never sit in.” — Greek Proverb
Imagine an 85-year-old woman named Dorothy. She has saved carefully her whole life and now wants most of her money to go to her children and grandchildren after she passes away. Most people her age invest very safely – putting most of their money into bonds or savings to protect it from market drops. But Dorothy’s goal is different. She doesn’t need the money to live on—she wants it to grow for her family.
Instead of planning for just a few years, she must think like she’s investing for the next 30. That means she has to choose investments with growth potential—stocks, not just savings accounts. Though she may not be around to see all the results, her investment decisions will shape her family’s financial comfort for decades.
Rethinking How Age Should Affect Investments
Financial experts used to follow a simple rule: as you get older, keep less money in stocks because you have less time to recover from market downturns. For example, an 85-year-old might be told to have only 15% in stocks and the rest in safe investments like bonds or cash.
But that advice assumes you’ll spend most of your money before death. What if your goal is to pass most of it on? Then the time horizon isn’t your life—it’s your heirs’. If 75% of your money will eventually go to your family, you actually have a 30-year or longer investment window. In that case, stocks—though they can swing up and down—are safer over time than inflation’s slow erosion of cash or bonds.
Story #1: George’s Living Legacy
George, 88, owned a small business and had saved $2 million. He needed only a small part of that money for his living costs. His daughter plans to start a medical nonprofit that could help people for decades. George’s advisor structured his portfolio into two segments:
25% was kept safe in cash and bonds for his personal needs.
75% was invested in stocks for long-term growth to support his daughter’s project.
Years later, even after modest withdrawals, that second portion nearly doubled – funding the charity’s first clinic. George didn’t just save money; he planted a lasting seed.
Why the Bequest Goal Changes the Math
When we measure risk, we’re really asking: “What’s the chance I won’t reach my goal?”
If your goal is to spend comfortably now, stock market swings can be scary.
But if your goal is leaving a growing inheritance, the biggest risk is losing purchasing power to inflation.
That’s why economists recommend that the “bequest portion” of an older investor’s portfolio be weighted heavily in growth—usually 65% to 90% in stocks. The remaining money can stay conservative for daily or health needs. Combining the two creates an overall portfolio about 60–75% in stocks—much more balanced than the old “100-minus-your-age” rule.
This level of equity exposure suits a multi-decade family goal while still securing funds for near-term needs.
A Shift From Spending to Stewardship
In this model, the older investor becomes less of a “spender” and more of a “guardian” of an intergenerational fund. Instead of focusing on shrinking the nest egg slowly, the purpose shifts to maximizing its value for future generations. Economists call this Intergenerational Wealth Maximization (IWM).
This mindset also explains why many wealthy seniors don’t buy annuities, which provide monthly lifetime income. While annuities guarantee predictability, they remove funds from the estate—reducing the legacy left behind. For someone determined to pass along wealth, that trade-off often isn’t worth it.
Story #2: Eleanor’s Dual Strategy
Eleanor, 90, keeps a small trust for her own care and a large one for her grandchildren. Her health fund invests in ultra-safe assets: short-term bonds and cash. Her family trust, however, is aggressive—mostly global stocks. Her advisor meets quarterly to rebalance, ensuring both sides align with her goals.
Eleanor’s heirs may eventually invest differently, but for now, her plan ensures that her money continues to grow even as she enjoys her later years comfortably.
Putting It All Together
For older adults who plan to give most of their assets to family, the “right” portfolio depends less on age and more on purpose. The smart strategy is to:
Divide assets into two groups – one for personal needs, one for the bequest.
Keep about one-quarter of total funds in safe, liquid investments for living expenses and long-term care.
Keep roughly three-quarters in growth-oriented assets like stocks to preserve spending power for future generations.
Avoid annuities or products that can reduce what heirs inherit.
Use trusts or written estate plans to ensure the bequest portion is managed with a growth objective long after passing.
Ultimately, investing for legacy isn’t a bet – it’s stewardship. The goal is to pass along not just money, but a foundation strong enough to support those who come after.
Sources are available upon request.
Sincerely,
Vaughn Woods, CFP, MBA
Vaughn Woods Financial Group, Inc.
2226 Avenida De La Playa
La Jolla, CA 92037
858-454-6900
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Past investment performance is not indicative of future results. Securities offered through Bolton Global Capital, Inc., Bolton, MA. Member FINRA, SIPC. Advisory services offered through Bolton Global Asset Management, a registered investment advisor, 579 Main St., Bolton, MA 01740 (978) 779-5361.
Investors should be aware that there are risks inherent in all investments such as fluctuations in investment principal. Past performance is not a guarantee of future results. Asset allocation cannot assure a profit nor protect against loss. Although the information has been gathered from sources believed to be reliable, it cannot be guaranteed. Views expressed in this newsletter are those of Vaughn Woods and Vaughn Woods Financial Group and may not reflect the views of Bolton Global Capital or Bolton Global Asset Management. The information provided is for general informational purposes only and should not be considered individual recommendation or personalized investment advice. Views expressed in this newsletter are those of Vaughn Woods and Vaughn Woods Financial Group and may not reflect the views of Bolton Global Capital or Bolton Global Asset Management. VW1/VWA0337.