More Than Enough

Jonathan Clements

IF YOU’RE LIKE MANY readers of this site, you’ll reach your 60s and discover one of those nice problems to have—that you’ve over-saved for retirement.

What now? For answers, check out a new book, More Than Enough: A Brief Guide to the Questions That Arise After Realizing You Have More than You Need. Author Mike Piper is the driving force behind both the Oblivious Investor website and the free Open Social Security calculator.

His short book—it runs just 129 pages—covers topics like charitable giving, talking to your kids about their future inheritance, tax issues, getting professional help and more. Here are five insights from the book that caught my attention:

  • “Most likely you’ll have decent investment returns and you won’t live to age 105 in a nursing home,” Piper writes. “And so, most likely, there will be a significant sum of money left over after you… have died. In other words, ‘enough’ ultimately turns out to be ‘more than enough,’ most of the time.”
  • I’d been toying with opening a donor-advised fund. But after reading More Than Enough, I’m having second thoughts. One reason: They’re expensive. For instance, Fidelity Charitable, Schwab Charitable and Vanguard Charitable all charge a basic administrative fee of 0.6% of assets, with fund expenses layered on top of that. I wouldn’t tolerate such high investment costs in my own portfolio, so I’m not sure why I’d willingly incur such costs on money earmarked for charity.
  • If you’ve researched a charity and trust it, you shouldn’t make a restricted gift, argues Piper. “And if you don’t trust the organization to use the money wisely, don’t give to that organization in the first place!” he quips.
  • More Than Enough makes a compelling case that the most tax-advantaged way to donate money is with a qualified charitable distribution (QCD) from your IRA. To be sure, you must be age 70½ or older to take advantage of this provision. If you’re age 73 or older, the money disbursed this way counts toward your annual required minimum distribution and, by holding down your income, it can reduce the hit from, say, Medicare premium surcharges. But for me, Piper clinched the argument with this point: If you make a donation by, say, gifting appreciated stock, you might reduce your taxable income with the resulting hefty itemized deduction, but you also can’t make use of your standard deduction. By contrast, with a QCD, you can both reduce your income and claim the standard deduction.
  • Piper also makes a compelling case for giving away money during our lifetime. Why not wait until death? One argument I especially liked: “[B]y the time the parents have died, the ‘kids’ are already retired,” Piper notes. “And at that point, the inheritance has no major effect on their happiness or standard of living…. Relatively modest gifts received early in life are often more impactful than larger inheritances received later.”

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