5 Ways To Build Generational Wealth Even in Retirement

Generational wealth-building doesn’t have to end at retirement. With smart planning and ingenuity, retirees can continue building wealth in ways that support their values, lifestyle and long-term goals.

Contents

Keep Growing Wisely Invest In ‘Granny Flats’Consider 529 Plans Rethink Retirement Risk Carve a Legacy Bucket

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Here are five ways to build generational wealth, even in retirement.

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Keep Growing Wisely

Retirement doesn’t mean pausing growth — it’s a shift from earning through work to earning through strategy.

“A smart withdrawal strategy, like harvesting from stronger asset classes, helps you stay growing while managing risk,” said Heath Harris, a founding financial advisor at Compound Advisory.

Harris also said exploring low-effort business ventures can help retirees continue building wealth while minimizing risk and taxes.

“Also, a lot of retirees find ways to stay active: investing in low, time-cost businesses like a vetted franchise, keeping a stake in a business they know or getting involved in family projects,” Harris said. “You don’t have to work full-time to keep building wealth.”

In addition, Harris said securities-backed lines of credit or collateralized accounts were underrated strategies for building generational wealth in retirement.

“They give you liquidity without forcing you to sell investments and trigger taxes — which can be a huge advantage if you need to jump on a business opportunity or handle an emergency,” Harris said. “Direct indexing, QCDs and tax-smart gifting strategies are also overlooked but powerful.”

Be Aware: 7 Things You’ll Regret Downsizing in Retirement

Invest In ‘Granny Flats’

Accessory dwelling units (ADUs), often called “granny flats” or in-law suites, offer retirees a way to generate income and increase property value without selling off assets.

As part of a legacy strategy, an ADU can serve multiple roles — housing loved ones, supporting aging in place or becoming a long-term wealth-building tool through rental income.

“Many localities have recently relaxed their zoning regulations to allow homeowners to build these small, secondary homes on their property,” said Brandon Blakeley, chief technology officer at Mirador Living, which connects older adults with long-term care options.

“Some retirees choose to rent out the ADU for additional rental income while others move into the ADU themselves and rent out their primary home,” Blakeley said. “They get the financial upside of downsizing without the downside of having to move out [of] the neighborhood. Either way, this development offers a big boon to property values.”

Consider 529 Plans

A 529 plan offers a tax-advantaged way to support a grandchild’s or other loved one’s future education while reducing the size of a taxable estate. For retirees focused on legacy-building, it’s a strategic tool that combines financial growth with meaningful impact.

“Contributions and investment gains are removed from the account owners’ taxable estate,” said Jonathan Sparling, director at CollegeWell and an accredited financial counselor. “Unique to 529 plans, account owners can make five years of tax-free contributions in a single year, up to $190,000 per beneficiary for married couples.”

Rethink Retirement Risk

Some retirees err on the side of extreme caution, limiting their lifestyle and avoiding growth opportunities out of fear.

“Living too conservatively is just as dangerous as overspending,” said Andrew Mark Latham, a certified financial planner with financial comparison platform SuperMoney. “Parking everything in cash or bonds might feel safe, but it quietly kills your buying power over time.”

Roth conversions are another tool for older adults who want to build generational wealth even in retirement.

“Roth assets pass on to heirs tax-free and without required distributions, making them one of the most efficient vehicles for legacy planning,” said Samuel Flaten, a partner at Narrow Road Financial Planning. “If you’re thinking about your children or grandchildren, consider what assets you’re leaving behind and how those assets will be taxed.”

Carve a Legacy Bucket

Jing Zheng, founder and financial planner at Neat Financial Planning, LLC, advised retirees to set aside a “legacy bucket” and fund it conservatively, so it doesn’t compromise their lifestyle and financial security.

“We then invest this bucket more aggressively, often using a mix of growth-oriented stocks and private alternatives, with the goal of long-term compounding,” Zheng said. “When the time comes, heirs not only benefit from that long-term growth — but also from the step-up in cost basis, which can significantly reduce capital gains taxes on inherited assets.”

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