FREE NEWSLETTER
Go to main Forum page »
Bill Perkins offers a radical goal: use your money to create the richest life possible, and aim to die with zero dollars left unspent. I’m told it doesn’t literally mean hit zero, just maximize experiences. I hope the book’s readers don’t take the title as a goal.
“Die with Zero” also advocates for intentional gifting to children or charities while you are alive. I agree, but for those trying to cover life’s what ifs during retirement (like the risk of LTC or survivor income) with their life savings that also presents a risk.
We gift to our family and charities, but not by spending assets except via a portion of RMDs. They will receive the bulk as a legacy.
Experiences over things for sure, but not by betting on the timing of your ultimate departure. The experiences Connie and I have had since retiring have been wonderful. I would like to do it again and to keep going.
Perkins is a poker player, and former derivatives trader. In short, he is a risk taker and has plenty of money to put at risk. I suspect that is not the case for most – nearly all – retirees.
The goal should be enjoyable and fulfilling experiences with sustained confidence in lifelong financial security. You can do both, we have done both. We set aside money just for the purpose of experiences. At the same time meaningful experiences don’t always require spending money as some in the HD community have expressed.
Our experiences range from cruising on the Queen Mary II to walking among penguins on the Falklands, touring the Holy Land, kissing the Blarney Stone, walking across the Little Big Horn, standing in a gas chamber at Auschwitz, walking on Hadrian’s wall, and on Omaha beach, visiting every capital in Europe, and many more plus visiting every state in the Union.
But we never considered doing any of that by using up our assets. Yes, our pension and SS income allows us more flexibility, but nevertheless, I would never seek to spend down our assets to zero or even close. That seems even a harder choice for those relying on accumulated assets for all their income. In fact, it’s a considerable risk in my opinion.
Seek those experiences, but don’t play an all-in-bluff on yourself.
I think the author misses the major points of the book and seems to only focus on the books title. 1. The point of life isn’t to endlessly accumulate financial assets but instead to use them while you are alive the ways that brings you the most joy and makes the greatest impact. 2. Different stages of life have different levels of wealth demand – time, health and financial health. Recognize the limits of each stage and take the most advantage of them. 3. Take big risks earlier in life. Gives you more time to recover if things go bad. 4. Delaying joy becomes costlier as you get older. 5. Give while living. You can make a larger impact now than waiting for the future… etc. For me, this book has changed my entire financial perspective. I was on my way to endlessly accumulate wealth and assets, like many who read HumbleDollar and this book opened my eyes to the limits of time and health.
I didn’t miss the point, but at the same time I don’t need a wealthy poker player to present what I view as normal behavior and make money at it as well. I bet you knew all those things before reading the book.
I don’t know how long I will live, but two grandparents lasted well into their 90s. My pension has no COLA and has been shrinking for 25 years. I have no biological children. If my nieces and nephews don’t inherit until they are nearing retirement age I’m fine with that. Equally, I am sure the charities named in my will will still be happy to receive the money. Aiming to die with zero sounds stupidly reckless, although I am not averse to enjoying myself while I still can.
I have a keen interest in FI, but not necessarily retiring early. As long as I enjoy the work, continuing to be part of the workforce, either as an employee, independent contractor or entrepreneur, is part of my life ambition.
Leaving a family legacy is part of the game plan, but honestly setting the stage for my son early on felt like a smarter play. This included regular investing very early in his life via an UTMA brokerage account at Vanguard that was used not only to jumpstart his financial path but also allowed for age-appropriate, teachable moments. Then when he was old enough to start working part-time, summer jobs, I matched 100% of his earnings into a custodial Roth IRA. Our deal is so long as he saves, 25% of what he makes, I will continue to match his earnings for Roth contributions; this will, in theory allow him to take advantage of the time aspect of his youth. I think that these early dollars will have greater impact and hopefully deliver amazing results for him over the longer term. It is my further intention that doing all of this early, with his direct involvement, will position him to have the skillsets to utilize any remaining legacy inheritance, which, if all goes well will also be substantial, in an educated and mindful manner.
At least that is the intent! 🙃
The problem with Die with Zero is that Perkins is writing abt life as a whole. Using the time buckets to get those experience dividends, but at what cost? It appears his ex-wife stayed back to raise his daughters, as he traveled all over.
Later on in retirement I can see spending, gifting and doing things with the discretionary money. But like Mr Quinn the remainder of *my life’s savings will reach zero with a purpose*.
After you have read that book, you might consider:
My take: https://401kspecialistmag.com/maximize-outcomes-not-incomes-die-with-zero/
And: https://401kspecialistmag.com/most-young-people-should-not-save-for-retirement-in-their-401k/
Gifts today are arguably more valuable than testamentary legacies. We are making annual, inter-vivos gifts to each child – not much difference in those gifts compared to investments we previously made in each child’s post-secondary education.
And, despite potential long term care expense, there should be plenty left after the second of us dies … or not.
Laughing. We claim we are die with zero people and informed our children of such. But barring a catastrophic health event or financial meltdown, we can’t seem to spend fast enough. Best guess is our kids end up with 200K or so.
Yesterday after 18 years I took a withdrawal from our oldest granddaughter’s 529 account. That money along with her academic scholarships will pay her fall tuition. I will do the same in the Spring.
And we will keep contributing to her and the other ten grandchildren’s plans. We won’t be here to see them all in college, but we will leave money to help their parents through it.
Then our life’s savings will reach zero with a purpose.
I’ve never had a need to investigate 529 accounts so I don’t know the answer to this question: If one or more of your grandchildren decide to go into a paid apprenticeship program (like electricians do), or the military, are they still able to access the money? Or is it strictly limited to the payment of college-related expenses?
It’s not limited to college expenses. In fact, the new law just passed expands it to private high school. They can be used for vocational training too. You can always take the money and just pay taxes on the earnings plus under certain circumstances unused funds can be turned into a Roth IRA for the child.
In some states the contribution is state income tax free, unfortunately not in NJ.
Great use of your resources, Dick. Such a help to your children in relieving the stress of education costs, brutal as they are.
That’s awesome. I’m sure their parents are so grateful.
Like many others, I feel that many of the concepts on “Die with Zero” are valid. Don’t just work to create an enormous stockpile of money. Rather than leave money in your will, gift it to family and friends at a time when it can benefit them the most.
The part that doesn’t resonate with me is that you need leave work as soon as possible and have lots of amazing experiences. I know that I am a bit of a broken record on this topic, but lots of people (definitely not all) gain meaning and satisfaction from their work. If they can work hard 48 weeks of the year, have 4 weeks vacation, they will feel like that’s a life well lived.
Yep, I know that many others would ideally like to retire early and travel, volunteer, engage in a range of other activities.
But this book felt to me like a bit of an attack on the dignity and meaning of work.
Rant over.
I liked the book, which I read about here, and found it provocative. I agree that it definitely operated from the assumption that we’re all just slaving away like drudges at our work and should get away from that as soon as humanly possible. In fact, it was almost framed as a moral imperative: Why would you waste another minute of your one and only life working if you don’t have to? If you take the perspective that one is only working for money and nothing else, then the author is right. But if the work itself is fulfilling and you want to keep doing it, that’s different. I got the sense that the author couldn’t even imagine that scenario!
I retired this month because I could afford to and I didn’t want to stay in my job any longer. My husband did not retire when I did because he still enjoys his job, even though we could get by without his income (and at some point, we’ll have to!). So everyone’s journey is different.
If you find dignity and meaning in work have at it.
If you’re “over” that and feel that at whatever level you are at you’re rather more hamster on a wheel, if you have financial independence then exercise it toward something more rewarding in the widest sense.
Personal choices and indeed advocacy for them don’t make others’ choices wrong.
“Die with Zero” always sounded a lot like the “take Social Security when you’re 62, when you’re ‘young enough’ to enjoy the money!” mentality to me. Both are betting against yourself, and both feel like a foolish (and in most cases, an unnecessary) gamble.
While I don’t *necessarily* wish to be the richest man in the cemetery, I find the prospect of being alive and destitute far less appealing. It’s an asymmetrical bet, as far I’m concerned.
I don’t know if you read the book, but in my opinion, that’s not a fair characterization of it. The author doesn’t advise being reckless. Rather, he says that people should, in this order: (a) make sure they have enough money to support themselves for the duration (b) enjoy the fruits of their labor (have fun, whatever that looks like for you) and (c) gift money to family or charity while still alive rather than waiting until you’ve passed.
I’d say the practical challenge is (a)—how can you be sure that you’re secured “enough” for your own needs? In my case, I have pension income, my husband has some, too, and in due course we will have Social Security in some form, plus we have long-term care policies. So with those things in place, we could spend retirement account money on fun/gifting without much fear that we won’t be able to care for ourselves. I don’t know how or if we will do that, but our situation is a good one for the book’s thesis. Someone without a pension could consider annuitizing some of their savings to accomplish the same thing.
We went with friends to a costly wine course dinner last night. I was asked if the cost was okay and I said “It is only money.” I’m inclined to spend money socializing, etc. Not saving for the descendents.
I enjoy discussions about this book and make reference to it often. bbbobbins makes very valid points about the “Spirit” of the advice preached in the book. Use the wealth we have accumulated over our lifetimes to enjoy experiences while we have the 3 legs of the stool (as Perkins refers to them), Time, Health and Money to enjoy them…and that happens in Retirement for most of us (early years of retirement).
RDQ has even advocated following the books advice by having a vacation home that he enjoys with his family by creating lasting experiences for all of them.
The other point I took away from reading the book is that of gifting to your family sooner rather than leaving a legacy later. I read a stat (not sure if it was in the book or elsewhere) that the average age for receiving an inheritance is early 60’s. Most kids (millennials) won’t need that inheritance at that age, after their kids (our grandkids)are raised and out of college unless they haven’t saved for retirement. We choose to help out our kids now by paying for things like summer camp for our grandkids…helping to give them great experiences of growing up as our kids enjoyed. These extra expenses for a young family are a lot and are greatly appreciated by them and the grandkids.
We will continue to do these things and travel (including an annual trip with our kids and grandkids)as much as we can now while we CAN and make memories and have great experiences, before we get to the NO GO years.
We inherited a fair sum from my parents when I was 63. This money positively affected our life as we both were able to retire early (and for me eliminate the anxiety of work), pay off the small balance of our mortgage, give a significant amount to our children to help one pay off her college debt, and another put the money towards a down payment for his first house. The money has also allowed us to pay for expenses in the first 5+ years of retirement, thus allowing our own retirement accounts compound uninterrupted. So even inheriting money in your sixties can positively affect both the children and their grandchildren.
PS Another benefit of the timing of my inheritance is it occurred after we had completed building our retirement home. We built it not knowing we would inherit anything so we’re conservative in our outlay. We have since been able to do some small upgrades with the money.
Thanks Mom and Dad!
It’s an interesting point the whole age of inheritees – I don’t need nor have I ever planned on receiving an inheritance but now my mother is sole surviving parent it’s certainly an unquantified buffer which helps my decision to retire sooner rather than later.
I’ve also been able to encourage her to get more aggressive with some of her assets (nothing spicy just Vanguard world equity indexes) on the basis that it doesn’t matter whether it loses money in the short term as her heirs will carry on holding.
I am trying to help her spend my inheritance by giving up my time to organise and take trips with her that she wouldn’t do alone. That’s a win-win IMV. Now if I could organise my brother to take more than 4 consecutive days off work then his family could also join us…..
I tried to convince my mom to do the same. They have annuities that more than cover all of their expenses so they can afford to be “risky” with another account, but she answered the advisors questions in a very conservative manner and I got her to move up a notch or two, but it was impossible to get her to see that it is very likely she will never touch that money at all.
I never disagreed about using money for experiences as I illustrated and we help family all the time and help fund grandchildren’s college.
But that is far different than using assets heading toward zero that may put your unknown future at risk.
I hear people often express concern over the possible cost of LTC. Is it prudent to reserve money for such event or give it away and take the risk?
it seems to me the concept of that book is similar to FIRE, you first need a lot of money to make it work.
Who says dying with zero means you need to put your unknown future at risk? To me, dying with zero means planning for a statistically maximum lifespan – in our case that is both of us living to 100, which is statistically majorly improbable.
From there, we use a risk-based spending guardrails strategy with a zero legacy goal. This approach to decumulation dynamically adjusts for portfolio value changes to maintain a defined MC percentage chance of success. Statistically it is set for us to die with zero, but in reality it is highly likely we will end up with a pretty good-sized legacy.
In other words, this is the “both and” option. It gives us permission to spend far more lavishly than we otherwise would, while giving us peace of mind that we will not run out of money, regardless of unforeseen expenses.
Well, have at it. I hope all the statistics, probabilities, stock market and vicissitudes of life and guardrails all work in your favor.
I’ve just spent the day at the practice round of The Open Championship. I think my portfolio balance has already reached zero!
You are the man. It must be a great experience.
I enjoy the links courses for their rugged beauty, and challenging conditions.
Since you are in NJ – ever play Forsgate? Its’ bunkers are very challenging.
Sorry, I like to watch the Open on the links courses. I haven’t golfed in 30 years, but enjoy watching the majors.. I stopped when I was working, go to night school traveling, and had kids and got involved in coaching, referring, and running local sports organizations, I thought I might pick it up again when the kids got older, but I never did. I have been told that Monmouth County has good public courses and a great online reservation system. Forsgate looks amazing – I’m sure the bunkers would crush me.
I reviewed this book almost 2 years ago. The title is meant to be provocative, but there are some solid ideas in his 9 rules. RDQ even commented favorably on the idea of time buckets back then.
I did and I also said this “This die with zero is not my cup of tea. As has been said, you don’t know your expiration date and unlike on packages of cookies ours actually means something.”
I also said much the same then as I wrote in para 2 and 3 above.
I would be cautious about his #5 related to giving sooner unless you have a large cushion. Too much can go wrong.
Thanks for remembering. I forget about that post.
As you identify Perkins doesnt exactly practice what he preachs given he is awash with wealth but it’s a useful conceptual guide to think about the purpose of wealth.
Obviously as a highly cautious individual you are far more likely to die like King Tut surrounded by all your riches than ever get near zero.
But the thinking might be useful for some. There are plenty of studies that show that in the no go years people don’t outspend even quite modest incomes so why not plan to run down some of those safety pots for experiences or to see loved ones benefit from the money when it is most valuable to them. ( and for the avoidance if doubt I don’t mean you RDQ here).
I think it is a risky concept to be marketing. As Rick said the title is meant to be provocative and that’s not fair to some who might follow the concept as advice.
You can have experiences and give to others without ever thinking about using your assets to near zero. The authors perspective is not one aligned with the typical retired person.
We could give more to our children now, but then run the (small) risk of being a financial burden to them in the next several years. I won’t take that risk. I also want as much certainty as possible that if Connie survives me there are no financial worries. She may well need some assistance because of her mobility issues.
I also don’t want our children to have to sell our vacation home unless they want to so we have provided for keeping and maintaining it. That house represents many years of family memories and experiences.
I don’t suggest depriving yourself just to have a large pool of money left, but there is nothing wrong with leaving money to a good cause either.
The title is just the hook – the truly financially optimised life would see us die with zero on an individual level.* It’s not that different from the famous Hunter S. Thompson quote:
“Life’s journey is not to arrive at the grave safely in a well preserved body, but rather to skid in sideways, totally worn out, shouting ‘Holy shit…what a ride!”
*To get more prosaic, the US tax-code generosity with estate taxes and step ups can mean it is still fairly optimal to die with quite a substantial amount of wealth. This isn’t the same elsewhere. In the UK for instance inheritance tax at 40% bites over a combined estate value of £1m for a couple or as low as £325k for an individual. Thus gifting prior to death is materially advisable.
I have yet to meet a single person–young, old, or otherwise–who’s thrilled about having to live in a “totally worn out” body. In fact, just the opposite is true; I hear far more remorse over the fact that said individual didn’t take better care of what they had, when they had it. Caveat emptor.
And no limits on gifting as there is here?
It’s complex. Deliberate deprivation of assets can disqualify you from state assistance when it comes to residental care. But for Inheritance Tax (IHT) there is quite a low limit on annual gifts, then regular gifts out of surplus income are ok then you make Potentially Exempt Transfers which escape IHT in full if you survive 7 years from the event (with some taper).
All of which means the best advice for those comfortable is to gift early and often.
Or the favoured planning of the rich has been to invest in agricultural land which has been exempt. This is now also being addressed to the noisy disgust of farmers who of course have previously benefitted from the artifically inflated value of agricultural land and the ability to pass of £ms in assets to their kids unlike any other citizens.
The problem is getting worse as IRA equivalent pots are to be dragged into IHT with the prospect that heirs will face up to 67% compound taxation on sums drawn from those pension assets – 40% IHT plus their own marginal income tax rate (as high as 45%) when they draw.
All of which will mean that dying near zero (or pragmatically with only a house) becomes a sensible approach to generational wealth preservation.