inheritance

[Moemg]

I was talking with a few friends recently and they mentioned they wanted to spend their money and not leave an inheritance .So how do you do it ? If you spend more than 4% you may run out of money but if you don't you'll probably end up with a large amount to pass on .Do you suddenly take up expensive habits at 80 ?Do you spend earlier and hope that your kids will take care you ?

 

[travelover]

Buy the maximum COLAed annuity? Or pre-plan funeral with all leftover proceeds to your favorite funeral director? Stockpile hemlock and spend until it is gone?

 

[Htown Harry]

Not sure how I will do it, but my dream plan has the check to the undertaker bouncing.

 

[MooreBonds]

I was talking with a few friends recently and they mentioned they wanted to spend their money and not leave an inheritance .So how do you do it ? If you spend more than 4% you may run out of money but if you don't you'll probably end up with a large amount to pass on .Do you suddenly take up expensive habits at 80 ?Do you spend earlier and hope that your kids will take care you ?

Apart from purchasing an annuity - the simple fact of the matter is, it's impossible to (unless you enjoy a goblet of hemlock, as another poster put it).

Due to the randomness of the stock market and future gains/losses, you have no way of knowing what withdrawing x% this year will do. And that is completely unrelated to the longevity variable.

So you have two variables (market returns and lifespan), completely uncorrelated (unless you have so much stress from running out of money that you have a heart attack and keel over?), that are (for the most part) unpredictable. Sure, you might guess that long-run average returns for the market will be positive, but as many studies have pointed out, certain downturns can result in portfolio annihilations if you don't stick to a 4% of current portfolio withdrawal. Since you have no idea ahead of time when those downturns will occur, you can never plan to fully fund everything until the last person dies.

Or, if they want to spend down to the last $200,000 or so, they could call up the cryogenic companies, go into deep freeze for a cool $100,000 or so, invest the $100,000 left, and hopefully the $100,000 will grow into a sizable stash [-]if they don't get dumped in the ocean in the middle of the night[/-] [-]buried in a shallow grave in the middle of nowhere[/-] when they perfect the thawing method and thaw them out.

 

[travelover]

................Or, if they want to spend down to the last $200,000 or so, they could call up the cryogenic companies, go into deep freeze for a cool $100,000 or so, invest the $100,000 left, and hopefully the $100,000 will grow into a sizable stash [-]if they don't get dumped in the ocean in the middle of the night[/-] [-]buried in a shallow grave in the middle of nowhere[/-] when they perfect the thawing method and thaw them out.

Say, wasn't someone looking for a post retirement business idea?

 

[Coach]

Leave your estate to charity?

Coach

 

[W2R]

Leave your estate to charity?

I have never counted on an inheritance, and I used to joke to my friends that for all I knew, my parents (very old fashioned, conservative Presbyterians) could have gone nuts and left everything to the Hare Krishnas or something.

Then someone told me that the Hare Krishnas don't even exist any more!

I am still not counting on anything unless/until I have it in hand (which I might at some time in the near future, but then who knows). That way I will never be disappointed.

 

[Bestwifeever]

Even leaving it to charity would still be leaving an inheritance. I guess in their wills they could specify that any remaining assets be cashed out and the money buried/burned along with them?

 

[kaudrey]

My grandmother did it by spending 13 years in a nursing home with Alzheimer's. Nursing home took all the money until Medicaid kicked in. Didn't have anything but a few momentos and clothes when she died at 94.

 

[megacorp-firee]

I am not sure that anyone can (short of the hemlock suggestion) plan their deaths to the dollar. What difference does it make if you leave a few bucks to the kids, the cats (or even resurrect the hare krishnas), or the red cross. When you're dead , you'll probably NOT care.
We plan to live our lives the way we want (subject to the budget limits we have). If the kids get a little pocket money when we kick, so much the better ... but we are not sacrificing any of our hard earned retirement fun to do it. It turns out that they will get some of the left over, ... but that's because of our LBYM habits over the years as well as now. I think that as we get more comfortable in FIRE, we will start to spend it down.... especially if the 'actuals' exceed the 'planned'. I could always learn to sail and buy a boat (if only I could get DW to learn how to swim and convince her that we should live on a boat for a few years).

 

[haha]

I was talking with a few friends recently and they mentioned they wanted to spend their money and not leave an inheritance .

From where I sit your friends have a peculiar goal. Is this supposed to be a final slap from the grave to children who have somehow disappointed them?

I am superstitious enough that even if I didn't love my kids, (which I do very much) I would want to treat them well so that I would have someone thinking some good thoughts about me, maybe even burning some candles for me, as I try to navigate the great divide.

Ha

 

[walkinwood]

The Hare Krishna movement (International Society for Krishna Consciousness) is still very much alive.

Besides, there are a billion (give or take a few million) Hindus who are devoted to Krishna - so don't count them out yet.

 

[W2R]

The Hare Krishna movement (International Society for Krishna Consciousness) is still very much alive.

Besides, there are a billion (give or take a few million) Hindus who are devoted to Krishna - so don't count them out yet.

Well, then that could still happen! I am sure my brother (executor of my late mother's estate) would have said something about it by now, though.

Well, one would hope he would have thought to mention it....

 

[lazygood4nothinbum]

this must be on your friend's list of things to do before death (thing #100, bounce final check.) maybe it's just a continuation of my being lazy & non-goal oriented. maybe i should have made at least a shopping list once in my life (probably would have saved me a bunch of trips to the store). but i can't live like that. crossing things off my list is not what gives me sense of purpose.

i'm just not money-motivated. i didn't live to work to make money and i didn't retire to spend it. i find enough satisfaction just getting through the day.

 

[Sandy]

Then someone told me that the Hare Krishnas don't even exist any more!

We have a hare krishna group nearby - they show up in all of the parades.

 

[megacorp-firee]

We have a hare krishna group nearby - they show up in all of the parades.

? we must be going to different parades... didn't see them at the St. Paddies day parade last time. Also been miss'n em (as in ... haven't seen them) at the airports.

 

[Moemg]

From where I sit your friends have a peculiar goal. Is this supposed to be a final slap from the grave to children who have somehow disappointed them?

.

Ha

No ,they really love their children but they feel they want to enjoy their money after they've educated their children.

 

[Finance Dave]

another option is a "flexible" lifestyle. Each year calculate the needs to live until your life expectancy. If you have more than this, spend it down to that level. If you have less, skip one of your vacations.

 

[haha]

No ,they really love their children but they feel they want to enjoy their money after they've educated their children.

Sure, I understand that. I think I misunderstood the original post.

I was talking with a few friends recently and they mentioned they wanted to spend their money and not leave an inheritance.

In the nature of things if one has a self funded retirement without using annuities, he/she is either going to come up short or have some left over.

The original quote sounded to me like two goals-one, spend money and two, not leave an inheritance. Say they set out to spend as much as they could without endangering their retirement, and without using annuities. They will either succeed and have what is to them a satisfying life, or fail and go broke. How much if any is left is kind of a residual of the interaction of many factors, rather than something that can be directly targeted.

As others have pointed out, if their goal is maximum predictable real lifetime income with no residual, short of suicide there is only one way- some selection of annuities probably including some or all with COLAs. Which IMO is not a bad solution for someone with this goal set. This could be more or less simulated for those who hate annuities by choosing a very long amortization of a TIPS portfolio-say until they are 110 years old- but it would likely pay out less during their lifetimes than the annuity option, and it would leave some at the end. Also it would present interesting management and income smoothing challenges, most strikingly re-investment risk.

Ha

 

[Khan]

I received a small amount from my mother. I'm not expecting anything else from anyone.

I'm leaving most of what I have to various causes I've given to over the years.

 

[youbet]

No ,they really love their children but they feel they want to enjoy their money after they've educated their children.

I wonder what is keeping them from enjoying their money? Perhaps some counseling would be in order?

 

[Robert the Red]

I have a friend whose parents had the same goal (burn through their $20+ million stash and leave nothing to the kids). Alas for them, they didn't quite make it and their 2 kids got about $2 million each.

Better luck next time around, I suppose. (If you're a Hare Krishna, you believe in reincarnation, right?)

 

[bow-tie]

I have a friend whose parents had the same goal (burn through their $20+ million stash and leave nothing to the kids). Alas for them, they didn't quite make it and their 2 kids got about $2 million each....

Damn... that is A LOT of money to spend... even over 30-40 years. It's mind-boggling.

 

[megacorp-firee]

Damn... that is A LOT of money to spend... even over 30-40 years. It's mind-boggling.

I would love that challenge!

 

[Gumby]

It is an interesting question. The young wife and I have no children and therefore no need/desire to leave them anything. To a certain extent, anything left when we die will have been "wasted", in that we could have spent more while alive. We will, of course, designate an appropriate charity and one or more of our nephews as beneficiaries, but I appreciate the feeling that one does not want to go to one's reward without having fully reaped all the benefits of those LBYM years. In any event, it will be the young wife's problem, not mine, as I am certain that I will predecease her.