Another "die with zero" question (poll)

[Lorenzo]

I could not disagree more. How can someone hit the target just right when they needed financial help for at least 5 years? Maybe the help was part of the plan.

Not all of us have family to help out at all, let alone help for multiple years.

My dear uncle was a good provider and feathered their nest egg very well, but saving enough that projections would show being able to continue the same posh lifestyle to age 100 would almost surely have resulted in over-saving (or equivalently, having worked longer than necessary). She had SS, so she was hardly destitute. The family footed the shortfall in the bill for her expensive care facility for, let's say, her final five years. She had no other bills to pay during that time. I'd say if you can fund the retirement of your dreams until age 95, you hit the target with precision even if you have to downgrade in the last few years. The end of my planning horizon is going to be more like 95, not 100. If I do make it to 100, I'll take what medical care I can scrounge (or is scrounged for me).

 

[B0bL0blaw]

unless you have a terminal diagnosis (and maybe even you do!), planning to "die with zero" is either not meant literally or (if it is) is extremely foolhardy. what happens if you live 5 years longer than you planned? 10? for reasonably healthy folks in their 50s, 60s, and 70s, (and even 80s+), what actual steps would you be willing to take to deplete your assets to zero and on what timeline? the whole point of financial planning, in my opinion, is to safeguard against the risk of running out of money. planning to die with zero goes directly against that, because of the uncertainties inherent in human life!

i will never intentionally deplete my assets below the amount that i need to live a comfortable life. if my assets grow substantially beyond that, i will give generously to charities and relatives. but never to the point of depleting my own safety cushion.

good luck!

 

[pb4uski]

I really don't fully understand the 'die with zero' mantra. To me it's similar to gleefully talking about collecting SS the first day possible to be sure they 'get all they're owed by Uncle Sam'. So you just want to spend for the sake of spending? You don't want an extra dime to give to charity once you're gone?

I mean, I'm certainly not giving a fortune to charity while I'm alive because I don't know whether I'll need it or not for LTC or something. But why is it so much better to die with zero than to have something to give away in your will? Because no one's gonna get it right - not down to $1,000, $10,000, or likely even $100,000! It just seems like a childish and small thing to aim for, at least if you're taking it as seriously as some do. Okay - if i know I have trouble spending money on myself and I have plenty, I'll try to indulge myself more to enjoy it more. But I'm not taking it to the nth degree. Point is, I don't do anything to the nth degree because I'm way too laid back for all that.

Great post. I agree, both die with zero and collecting SS ASAP because one feels "owed" are pretty stupid ideas IMO.

I wonder how many of these die with zero advocates end up needing LTC and end up either with Medicaid LTC when they could have afforded something much nicer or having to rely on their kids. No thank you.

My estate will simply be whatever happens to be left. We spend whatever we need to to enjoy life and family.

 

[Lewis Clark]

My dear uncle was a good provider and feathered their nest egg very well, but saving enough that projections would show being able to continue the same posh lifestyle to age 100 would almost surely have resulted in over-saving (or equivalently, having worked longer than necessary). She had SS, so she was hardly destitute. The family footed the shortfall in the bill for her expensive care facility for, let's say, her final five years. She had no other bills to pay during that time. I'd say if you can fund the retirement of your dreams until age 95, you hit the target with precision even if you have to downgrade in the last few years. The end of my planning horizon is going to be more like 95, not 100. If I do make it to 100, I'll take what medical care I can scrounge (or is scrounged for me).

In my opinion, not having enough assets to support yourself until the end of your life should never be considered as over saving, no matter how much your assets may have been worth at any given previous time.

Hitting any particular target for end-of-life assets, whether zero or any other number, is extremely difficult. We can never know until the day we die what our overall investment returns or expenses will be.

If your target is to make it on your own until age 95, and then either accept a lower lifestyle or accept financial help from family, than that is your target. If you expect that financial help (or other types of help) will be available from family then it may be a good target for you. Having family help available will no doubt make everything easier near the end of our lives.

For those of us with no family to count on, planning on family help at any age is foolhardy at best. If I reached any point where my own assets were insufficient for me and my wife, then I would consider it a hard fail for us.

 

[Lorenzo]

I really don't fully understand the 'die with zero' mantra. To me it's similar to gleefully talking about collecting SS the first day possible to be sure they 'get all they're owed by Uncle Sam'. So you just want to spend for the sake of spending? You don't want an extra dime to give to charity once you're gone?

I don't want to "spend for the sake of spending"; I want to spend on things that give me enjoyment. At least during my go-go years, there is no end to the things I can conjure up in my mind that I'd like to do. In reality I have fairly modest ideas for my bucket list, but if I had the money I could easily spend on fantastically expensive toys and travels. New hobbies, likely involving new tools/gear. Heck, I always fantasized about starting a business that didn't need to be profitable--like a brewery or a scuba diving shop or some such ridiculousness--just to have fun and pal around with "employees" and customers. Or maybe a hobby farm. Build a custom dream house. I think I'm pretty creative at finding things to spend money on for fun.

As far as charity is concerned, while I can understand that for some philanthropy is a major part of their lives, it isn't for me or DW. It's secondary to having as much fun ourselves as possible. Call us hedonistic. In our wills, DW and I are leaving whatever residual amount there is after the other of us is gone to a charity that we like very much ... but not quite enough to give giant amounts to during our lifetimes.

 

[Lorenzo]

I am sure someone already mentioned on this thread, but you need a 3rd option on your poll: I don't WANT to die with zero. In fact, we want to die with more than what we retired with (inflation adjusted). To each of their own.

No, thank you. The intent of this poll was to limit the respondents to those who can envision enjoyably spending all their money on themselves, to see how many of us are doing it. Those who do not find the idea appealing can start a different poll.

 

[Lorenzo]

If I remember correctly, (it's been a while since I read the book), he does not advocate to actually have $0 at your end of life, but have as little as possible but still live the life you want until the end.
That can be a hard thing to do.
I would guess that even though "the money is there", many folks don't like seeing the amount go down year after year.

I haven't read the book, and as I said in the original post my question wasn't intended specifically to use the book's definition of "die with zero," but your second sentence does get at the crux of what I was curious about: How many folks remain undeterred by "seeing the amount go down year after year" from spending all that FIRECalc or other such tools say they can spend in their estimated remaining lifetime (assuming they are enjoying the results)?

 

[audreyh1]

No, thank you. The intent of this poll was to limit the respondents to those who can envision enjoyably spending all their money on themselves, to see how many of us are doing it. Those who do not find the idea appealing can start a different poll.

Our spending is not all on ourselves. We also gift including charity. We are deliberately gifting with a warm hand which means more spending while we are alive.

 

[Lorenzo]

Our spending is not all on ourselves. We also gift including charity. We are deliberately gifting with a warm hand which means more spending while we are alive.

You hit on a definitional, maybe philosophical question. If one gets enjoyment or satisfaction out of spending on others, is that just a subset of spending on oneself? I certainly have given money to charity and spent money on things and experiences for friends and family, but I consider that just part of my budget. How much is altruism? How much is self-interest? It's a question, but probably best left for the philosophers.

 

[audreyh1]

You hit on a definitional, maybe philosophical question. If one gets enjoyment or satisfaction out of spending on others, is that just a subset of spending on oneself? I certainly have given money to charity and spent money on things and experiences for friends and family, but I consider that just part of my budget. How much is altruism? How much is self-interest? It's a question, but probably best left for the philosophers.

It’s just spending period. Whether on yourself or not is immaterial IMO.

 

[Lorenzo]

It’s just spending period. Whether on yourself or not is immaterial IMO.

You're absolutely correct. I would re-phrase any posts in which I clumsily referred to spending on oneself. The question is about spending down one's stash in any way that is meaningful to the retiree.

 

[RunningBum]

Huh. My Mom nailed it. She passed this morning--very sad, but also very grateful her suffering from bad arthritis and Alzheimer's is finally over after too many years. In December she was going on Medicaid as her assets were down below $4K. That's about as close to zero as you could get.

Actually this is slightly misleading in that when my dad was alive, their assets fell to where he could split off his share of whatever the number was and she went on Medicaid for her memory care and assisted living. So they actually did run out and have to rely on some government aid. We didn't do any hiding or early transfer of assets to game the system. They each had a sparse closet of clothes, furniture for a studio/room, and each had a TV. When he died last year, she got his assets and went off Medicaid for about a year until her care ate up that money. We were fortunate that the place she was staying did take Medicaid after at least a year of paying full price, and we all thought it was a very good place.

This wasn't their plan, it's just how it worked out. In Dad's final months, he lamented that he wasn't leaving behind much at all for us, but they had given us kids some money in earlier years when we needed it. And they didn't burden us with expenses for their care.

 

[Gumby]

Huh. My Mom nailed it. She passed this morning--very sad, but also very grateful her suffering from bad arthritis and Alzheimer's is finally over after too many years. ...

Sorry for your loss RunningBum. No matter how much it was expected, it's still a sad thing and a big life change for those left behind.

 

[braumeister]

Huh. My Mom nailed it. She passed this morning--very sad, but also very grateful her suffering from bad arthritis and Alzheimer's is finally over after too many years.

Condolences. Coincidentally, my mom was about the same. Her last couple of years in memory care in her 90s were very expensive, and her net worth when she died was just a few thousand. Nearly perfect timing, although accidental.
I've always taken that as a lesson that since we can't predict the timing, we need to maintain a substantial cushion.

 

[sengsational]

I mean, I'm certainly not giving a fortune to charity while I'm alive because I don't know whether I'll need it or not for LTC or something. But why is it so much better to die with zero than to have something to give away in your will?

I think the author of the book might say if you want to be secure in long term care, then insure for it. Insure for every bad thing. When you know you're covered for what you will need, even if "something bad" happens, then you're free give excess money away now, while your kids really could use it, for instance. The author argues that people often sit on a wad of cash "just in case" of a bunch of bad things that might happen. Then not all of the bad things happen, maybe none of them, they die, and their grown children don't get much utility out of the money they get after the parent passes because they're old themselves.

The title of the book isn't really what the book is about, but the publisher probably pushed that title. Then people chime in without reading the book and on it goes.

 

[pb4uski]

Sorry for your loss RB. Even when by all reasonable sandards it is a belssing in disguise, it is still hard. Godspeed. But you are right... it sounds like she nailed it.

 

[Lorenzo]

Thank you for sharing that, RunningBum, and my condolences. Both my parents died with no savings. My mom had been surviving on a very small pension and SS. My dad the serial entrepreneur never managed to save and died of a heart attack while planning his next venture. I realize our discussions here are almost academic in the sense that we are all going to do better than that.

 

[audreyh1]

Huh. My Mom nailed it. She passed this morning--very sad, but also very grateful her suffering from bad arthritis and Alzheimer's is finally over after too many years. In December she was going on Medicaid as her assets were down below $4K. That's about as close to zero as you could get.

Actually this is slightly misleading in that when my dad was alive, their assets fell to where he could split off his share of whatever the number was and she went on Medicaid for her memory care and assisted living. So they actually did run out and have to rely on some government aid. We didn't do any hiding or early transfer of assets to game the system. They each had a sparse closet of clothes, furniture for a studio/room, and each had a TV. When he died last year, she got his assets and went off Medicaid for about a year until her care ate up that money. We were fortunate that the place she was staying did take Medicaid after at least a year of paying full price, and we all thought it was a very good place.

This wasn't their plan, it's just how it worked out. In Dad's final months, he lamented that he wasn't leaving behind much at all for us, but they had given us kids some money in earlier years when we needed it. And they didn't burden us with expenses for their care.

Sorry for your loss, and especially having a parent long in this type of suffering.

Wow, that did cut it close!

 

[audreyh1]

I think the author of the book might say if you want to be secure in long term care, then insure for it. Insure for every bad thing. When you know you're covered for what you will need, even if "something bad" happens, then you're free give excess money away now, while your kids really could use it, for instance. The author argues that people often sit on a wad of cash "just in case" of a bunch of bad things that might happen. Then not all of the bad things happen, maybe none of them, they die, and their grown children don't get much utility out of the money they get after the parent passes because they're old themselves.

The title of the book isn't really what the book is about, but the publisher probably pushed that title. Then people chime in without reading the book and on it goes.

Unfortunately LTC insurance doesn’t cover all LTC expenses, it has a lifetime limit. And sometimes there are serious fights getting it approved. Without a serious advocate for the elderly needing LTC, it may be impossible to access. Definitely not guaranteed! We definitely make sure we have funds to cover those expenses.

 

[Franklin]

Unfortunately LTC insurance doesn’t cover all LTC expenses, it has a lifetime limit. And sometimes there are serious fights getting it approved. Without a serious advocate for the elderly needing LTC, it may be impossible to access. Definitely not guaranteed! We definitely make sure we have funds to cover those expenses.

My FIL always said he hoped his last check bounced "to the funeral home" and he was right on. For me ( I read the book and liked it) but I always pack 5 days of clothing for a 4 day trip. I ain't gonna cut it that close.

 

[RunningBum]

Thanks for the kind words about the loss of my mother. To put a nice wrap to it, during the last few visits I had in the last 2-3 years my mother had been pretty non-responsive. But in the very last visit in June, my sister and I played Crazy 8s and I held my hand so Mom could see it. The family always played a lot of cards, and there was often a lot of banter, but sis and I stepped it up a LOT and we got some mumbled chuckles out of her. So my final visit and memory of her is a very good one to keep and I got to see that she was still in there.

 

[TheWizard]

My FIL always said he hoped his last check bounced "to the funeral home" and he was right on. For me ( I read the book and liked it) but I always pack 5 days of clothing for a 4 day trip. I ain't gonna cut it that close.

I'm pretty sure that Warren Buffett isn't going to bounce his last check to the funeral home and neither am I, even though I have less than 1% of Warren's assets.

I guess I can understand why poor people might talk like this...

 

[levindb]

There is a difference between PLANNING to Die With Zero, and ACTUALLY doing it. For us, we do PLAN to Die With Zero, but we PLAN on living to age 105. DW may actually live that long as her mother made it to age 98 and her grandmother lived to age 101. My genes are very mixed with parents passing at age 80, but a few of my close male relatives did not make it to age 60.

By PLANNING to run out of savings at age 105, we would have more than $1M (in Today's dollars) at age 95...so that age 105 may sound ridiculous to many, pushing up daisy's with $1M at age 95 has been a goal I have seen others mention. There is only a 6.4% difference in annual budget numbers for these two different approaches ($0 at age 105 vs $1M at age 95)...and the age 105 budget is the lower budget number.

Finally, having $0 in savings/investable assets is much different than having a Net Worth of $0.

 

[FREE866]

Yeah, the whole notion of "die with zero" doesn't appeal to me. I would think watching your balance go down so much over the years would cause me anxiety as well. I want serenity more than ever and although it's "just money" having a buffer gives me enormous comfort.

 

[TheWizard]

There is a difference between PLANNING to Die With Zero, and ACTUALLY doing it. For us, we do PLAN to Die With Zero, but we PLAN on living to age 105...

105 is another 30 years for me.
If I assume my investable assets double every 7 years or so, then I guess I'll have around sixteen times as much in nominal dollars then.

Obviously not a DWZ situation here...