Should you Die with Zero?

A while back, I wrote about non-traditional investments such as taking care of yourself and your loved ones.  “Solving for happiness” instead of dollars was a key theme.  This article prompted one of my favorite steely-eyed killer/vampiric hauler of carboard to suggest the book Die with Zero to me.

We’ve all likely heard the notion that our last check should be to the undertaker and it ought to bounce.  It’s a cute idea, but if you’re reading personal finance blogs, there’s a good chance you want to hedge a bit and at least start retirement with a lot of zeros before the decimal point. 

Die with Zero is not a gimmicky book about how to miserly stiff others and somehow hack the saving and spending cycle up to your last breath.  Rather, it’s a pretty inspirational argument that we should try to spend our life solving for maximum fulfillment during the seasons of life when we can actually enjoy the experiences.  

The author, Bill Perkins, offers a reasonable mathematical formula for calculating “peak net worth,” a conceptual point that he suggests allows you to stop trying to accumulate more dollars so you can focus on accumulating more meaningful memories.  At peak net worth, one can theoretically bump up the throttles on consumption to fund life experiences while knowing that basic needs will be covered up to life expectancy.  

Die with Zero is absolutely worth reading, although I have to confess that reading, much like Thanksgiving Dinner, has a bit of a soporific effect on me, so I’m largely an audiobook consumer these days!

The Surprise Twist

Die With Zero has a lot of statistics about aging, saving, earning, and consumption to pack its argument with punch. The most surprising statistic however was this: the average age at which Americans receive an inheritance, if they receive one, is 60!  You may want to let that sink in. 

It makes sense that healthy and wealthy folks who are able to leave an inheritance probably die in their 80’s having had children in their 20’s, but this number surprised me.

The author makes the point that, in our 60s, we have already made our own way in the world.  We’re (hopefully) already contemplating how to decumulate our own wealth.  In short, it’s too late for us to max-perform the enjoyment of an inheritance if it arrives so late in life.  

What to do about Late Inheritances

If American cultural norms around money were squadron standards, we’d expect to read some of the following rules:

• Don’t talk about money.  Someone will end up feeling bad.
• Don’t talk about death. It makes people sad and some believe it brings death sooner.

Joking aside, these are toxic norms for families.  As Jonathan Swift once wrote, “It is useless to attempt to reason a man out of a thing he was never reasoned into.”  I.e., we probably don’t come by these cultural norms because of sound arguments and spirited debate.

Rather, we see others shift and squirm when the topics of money and death start to percolate and we learn that these topics are a wet blanket.  

I don’t think it’s too practical to get every set of parents out there to start engaging in estate planning as an open family dialogue, but here are a few tips you might use to help your family:

• • Discuss estate planning with your spouse and adult-age kids at least once a year.
    • Double check where your Will, Living Will, Healthcare & Durable Powers of Attorney are.
    • Validate names of representatives and guardians.
    • Validate where you’re directing the flow of assets.
    • (Advanced) Give a copy of your documents to those named. 
    • (Advanced) Tell them your intent.
    • (Advanced) Do the math.  Calculate the dollars your heirs will receive, not just percentages. It might surprise you and inspire earlier giving. 
  • Look for targets of opportunity with your parents.
    • Mention to your parents that you just updated your documents.
    • Tell them that you talked to your own kids about your Will/Trust/etc.
    • If they’re military retirees, offer to send them the link to the Air Force Legal Assistance website where they can pre-fill and schedule FREE estate documents with a JAG. 
    • (Advanced) Ask them if they have documents in place and when last they reviewed them.
    • (Advanced) Ask if they’re willing to share their documents so you’re ready to help, especially in the event of sudden death or cognitive decline.
    • (Expert) Offer to pay for an attorney consultation and go with them.  

• Run the numbers.

• • Research your own life expectancy.
  • Calculate what you’re likely to start and end retirement with.
  • List what your own heirs might do with any inheritance you’re going to leave by age:
    • 20’s: Erase college debt? Avoid debt cycle altogether? Trip to exotic locale? Start a business?
    • 30’s: House down payment? Grandkid college seed money? Outsized experiential vacation? Pay for expensive kids’ experiences? Adoption expenses? 
    • 40’s, 50’s, 60’s, etc.:  Less sexy things that they can already afford? 
  • (Advanced) Tell your parents what your own plans for lifetime giving are.
  • (Advanced) Ask your parents if they have concerns about the tax effects of giving.
  • (Expert) Offer to have your parents come to your meeting with your financial planner so they can see the things you discuss. 

These action steps won’t work for every family, and some probably won’t work for almost any family.  But the key is to face the reality.  We’ll all die and we’ll all need a plan to give away the leftovers.  Chances are, our parents will face this music sooner than we will, but we have a better chance of getting our own house in order than convincing other to tidy up theirs.  

Cleared to Rejoin

Die with Zero is a quick read/listen, but the key message is this: solve for maximum life fulfillment, not just dollars.  If passing wealth and opportunity is part of your plan, there’s a strong case to pass it when it can be used on something better than denture cream and Medicare premiums.  Finally, since none of us are getting out of here alive, let’s plan for an orderly departure and look for ways to ensure that our parents are doing the same.

Fight’s On!

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