Dying Broke (On Purpose) Article

e5116 · Post by **e5116** » Sat Oct 03, 2020 9:01 pm

I found the below piece quite interesting -- and perhaps contrary to certain Bogleheads ideals -- or maybe not. It encourages spending money (that you have of course) during your prime years, practice giving while you're still alive, and trying to die with nothing left. I found it compelling.
"Why (and How) I Plan to Die With an Empty Bank Account"
https://www.bloomberg.com/amp/opinion/a ... nk-account

Here's the key except in my opinion summarizing the argument:

"But the idea should become mainstream. After speaking with Bill Perkins about his new book, “Die With Zero: Getting All You Can From Your Money and Your Life,” I was shocked to find myself convinced that spending more money while you’re alive is more fulfilling than leaving behind a nest egg.

“With each year that passes … our ability to convert dollars into positive life experiences declines over time,” Perkins tells me. The “optimal utility of money,” as he calls it, is using money to have the maximum greatest experiences you can in your living years. It’s important because experiences are what actually drive fulfillment and happiness. “I’m more about saving your life than saving your money,” he says."

Thoughts? Different perspectives?

AerialWombat · Post by **AerialWombat** » Sat Oct 03, 2020 9:04 pm

This is what I’m doing, but I think it’s easier for those of us with no heirs or other family. I literally have nobody to leave the money to, except charity. So, I do my giving now, where I can see how it helps. Ego stroke, yes. Same with experiences, though.

000 · Post by **000** » Sat Oct 03, 2020 9:05 pm

What if expenses increase dramatically in twilight years?

What if human life expectancies increase dramatically?

What if spending doesn't give as much satisfaction as the security of having enough?

manatee2005 · Post by **manatee2005** » Sat Oct 03, 2020 9:11 pm

If you knew the exact day you would die, then you could plan it like that.

However since we don't know that day, we don't want to be eating dog food in our twilight years. It's better to be over prepared than under prepared.

Dennisl · Post by **Dennisl** » Sat Oct 03, 2020 9:13 pm

I feel like that philosophy is epitomized by

https://www.google.com/amp/s/www.inside ... 20-9%3famp

I think it’s an amazing and inspiring philosophy. Unfortunately, the vast majority, maybe not on this forum, of people are struggling to put food on the table and a roof over their heads. It’s truly a luxury to be able to sit and think how my money can be used to maximize my experiences and happiness. I understand that it’s small minded to be driven by fear. Fear of not having enough for retirement, living in debt, having to ask others for help. I still haven’t grown past that stage, having grown up with very little. At this point, I’d settle with having enough.

sailaway · Post by **sailaway** » Sat Oct 03, 2020 9:15 pm

If only I knew when I was going to die, planning would be so much easier.

David Jay · Post by **David Jay** » Sat Oct 03, 2020 9:18 pm

I was moved to change my plans when I read Taylor say that they purchased annuities (SPIA

) to meet all their needs so they could give to their kids while they were still alive. In my case, a large part of that “giving” can be shared travel and experiences but also 529 plans and such. My goal, if one of us lives to be 90 or more, is to have passed on at least half of our kids’ inheritance before we pass.

Normchad · Post by **Normchad** » Sat Oct 03, 2020 9:19 pm

This is certainly my goal. I like “Die Broke”.

It is a little hard to implement perfectly, with the uncertainty of how long I will live etc. I suppose I could just annuitize everything.

Personally, I’m not concerned with running out of money, nor of catastrophic expenses at the end. I’m in a very small minority I’m sure, but if I pass away a little bit earlier than absolutely necessary, I’m okay with that. I’m not going to save up an extra million, just so I can live on life support for an extra six months at the end......

Ged · Post by **Ged** » Sat Oct 03, 2020 9:19 pm

I have children who are not as well off as I am. I will be leaving them the bulk of my money.

Gnirk · Post by **Gnirk** » Sat Oct 03, 2020 9:21 pm

Ged wrote: ↑Sat Oct 03, 2020 9:19 pm I have children who are not as well off as I am. I will be leaving them the bulk of my money.

+1

Tingting1013 · Post by **Tingting1013** » Sat Oct 03, 2020 9:25 pm

The article does not say you have to spend every penny on yourself, it says to spend money on yourself and your kids when you are still alive. Makes perfect sense to me. I’m sure my kids could use their inheritance money much more effectively in their 30s rather than in their 60s.

As far as outliving your nest egg, I think it’s an overstated risk. Just make sure you can manage a 4% SWR (including SS) at age 60 or 65 and then give the rest to your kids at that time.

austin757 · Post by **austin757** » Sat Oct 03, 2020 9:25 pm

There was a book published in the late 90s called “Die Broke” that’s similar to what was said in the article. The major theme was to be generous with your money while you’re still alive, rather than leave a large nest egg to ungrateful heirs.

As mentioned, it’s tough because we can’t predict when we’re going to die (obviously). You could be in your 40s and find out you have Stage IV cancer, or you could be like Taylor who is well into his 90s and strong as an ox. I suppose like everything in life, try to find some common ground and balance.

Cyclesafe · Post by **Cyclesafe** » Sat Oct 03, 2020 9:27 pm

Longevity risk can be managed through social security and a SPIA topper. That's my plan.

Tingting1013 · Post by **Tingting1013** » Sat Oct 03, 2020 9:28 pm

Cyclesafe wrote: ↑Sat Oct 03, 2020 9:27 pm Longevity risk can be managed through social security and a SPIA topper. That's my plan.

+1

student · Post by **student** » Sat Oct 03, 2020 10:03 pm

You may find this article about Chuck Feeney interesting. https://www.forbes.com/sites/stevenbert ... efff693a2a

flaccidsteele · Post by **flaccidsteele** » Sat Oct 03, 2020 10:08 pm

e5116 wrote: ↑Sat Oct 03, 2020 9:01 pm Thoughts? Different perspectives?

Completely agree

That’s why I retired in my 40s

The time I spend raising my child and hanging out with my family is worth more than a few extra bucks

Normchad · Post by **Normchad** » Sat Oct 03, 2020 10:15 pm

student wrote: ↑Sat Oct 03, 2020 10:03 pm You may find this article about Chuck Feeney interesting. https://www.forbes.com/sites/stevenbert ... efff693a2a

Thanks for the link. I found it interesting. What a generous man.....

WildBill · Post by **WildBill** » Sat Oct 03, 2020 10:30 pm

Normchad wrote: ↑Sat Oct 03, 2020 10:15 pm
student wrote: ↑Sat Oct 03, 2020 10:03 pm You may find this article about Chuck Feeney interesting. https://www.forbes.com/sites/stevenbert ... efff693a2a
Thanks for the link. I found it interesting. What a generous man.....

Chuck Feeney is a mensch

Normchad · Post by **Normchad** » Sat Oct 03, 2020 10:49 pm

WildBill wrote: ↑Sat Oct 03, 2020 10:30 pm
Normchad wrote: ↑Sat Oct 03, 2020 10:15 pm
student wrote: ↑Sat Oct 03, 2020 10:03 pm You may find this article about Chuck Feeney interesting. https://www.forbes.com/sites/stevenbert ... efff693a2a
Thanks for the link. I found it interesting. What a generous man.....
Chuck Feeney is a mensch

I figured it was a compliment, but looked it up to be certain.

The key to being 'a real mensch' is nothing less than character, rectitude, dignity, a sense of what is right, responsible, decorous." The term is used as a high compliment, implying the rarity and value of that individual's qualities. ...

Well said. I agree

FIREchief · Post by **FIREchief** » Sat Oct 03, 2020 11:09 pm

How does anybody know how much they’ll need between today and death?

Kookaburra · Post by **Kookaburra** » Sat Oct 03, 2020 11:16 pm

The article implies that one must spend money to have optimal experiences. I certainly don’t agree with that.

BH+ · Post by **BH+** » Sat Oct 03, 2020 11:25 pm

I remember reading a small book I borrowed from the library about 20 or so years ago with a similar theme. The gist of it was "I want to spend my last dollar with my last breath."

It can be done using a combination of annuities, long term care insurance, reverse mortgages, and maybe a few other insurance products.

maroon · Post by **maroon** » Sun Oct 04, 2020 1:27 am

This is/was my parents' philosophy. In their early retirement, they lived the high life and traveled a lot. Now that they're elderly, they're much less agile (so their traveling days are over), and they're also vocalizing some money concerns. I'd say this "die broke" game is pretty hard to play successfully.

flaccidsteele · Post by **flaccidsteele** » Sun Oct 04, 2020 4:19 am

Kookaburra wrote: ↑Sat Oct 03, 2020 11:16 pm The article implies that one must spend money to have optimal experiences. I certainly don’t agree with that.

+1 ^ this

MNSooner · Post by **MNSooner** » Sun Oct 04, 2020 5:25 am

BH+ wrote: ↑Sat Oct 03, 2020 11:25 pm I remember reading a small book I borrowed from the library about 20 or so years ago with a similar theme. The gist of it was "I want to spend my last dollar with my last breath."

It can be done using a combination of annuities, long term care insurance, reverse mortgages, and maybe a few other insurance products.

It sounds like a lot of fees to pay in order to give away your money in your lifetime. I prefer maximizing what I give to heirs/charity and minimizing the drag of fees.

bradinsky · Post by **bradinsky** » Sun Oct 04, 2020 7:04 am

Ged wrote: ↑Sat Oct 03, 2020 9:19 pm I have children who are not as well off as I am. I will be leaving them the bulk of my money.

I agree with this! It seems to be more difficult for younger generations to save & get ahead. I don’t wish too leave everything to my children, but enough that it makes things a little easier for them.

happyisland · Post by **happyisland** » Sun Oct 04, 2020 7:10 am

flaccidsteele wrote: ↑Sun Oct 04, 2020 4:19 am
Kookaburra wrote: ↑Sat Oct 03, 2020 11:16 pm The article implies that one must spend money to have optimal experiences. I certainly don’t agree with that.
+1 ^ this

Since the rest of our culture highly values the hoarding of money, I find this article to be a refreshing counterpoint. You don't have to spend your money on experiences, necessarily. The idea is to spend your money on what you'd want it spent on (heirs, charity, personal experiences, etc) while you're still alive. With SPIAs and some long term care insurance it doesn't seem to be that difficult to execute either.

Edited to add that I got a lot out of the "Die Broke" when I read it back in the 90s. Has anyone read the new "Die with Zero" book yet? Reviews?

Kelrex · Post by **Kelrex** » Sun Oct 04, 2020 7:14 am

I challenge the presupposition that spending more would make me happier.

For everything there is a balance. For people who feel the need to work at jobs they hate in order to hoard as much money as possible, and who feel paranoid about spending it? Sure, they could probably use a good solid nudge to lighten up a bit.

That's not me though, and I think the audience that needs that message is pretty limited.

Ron · Post by **Ron** » Sun Oct 04, 2020 7:23 am

I would rather die with money than live without it...

- Ron

goblue100 · Post by **goblue100** » Sun Oct 04, 2020 7:30 am

Ged wrote: ↑Sat Oct 03, 2020 9:19 pm I have children who are not as well off as I am. I will be leaving them the bulk of my money.

If you can give them some help while you are both alive it might be more meaningful to both of you. Obviously you don't want to set expectations that the parent gravy train will be forever. If you don't have greedy kids it should not be a problem.

TomatoTomahto · Post by **TomatoTomahto** » Sun Oct 04, 2020 7:47 am

goblue100 wrote: ↑Sun Oct 04, 2020 7:30 am
Ged wrote: ↑Sat Oct 03, 2020 9:19 pm I have children who are not as well off as I am. I will be leaving them the bulk of my money.
If you can give them some help while you are both alive it might be more meaningful to both of you. Obviously you don't want to set expectations that the parent gravy train will be forever. If you don't have greedy kids it should not be a problem.

We are lucky enough to be able to gift our kids to the gift exclusion amount annually. Some of them “need” it more than others. None are greedy. One of them had to have their “arm twisted” to accept it; they only did so after I reframed it as a gift to us. It gives me pleasure to know that it made two years in the Peace Corps and adopting a dog more “doable” for her.

minesweep · Post by **minesweep** » Sun Oct 04, 2020 8:41 am

Ron wrote: ↑Sun Oct 04, 2020 7:23 am I would rather die with money than live without it...

- Ron

I recall Jim Rodgers once saying: "The only thing worse than dying is running out of money."

oldfort · Post by **oldfort** » Sun Oct 04, 2020 8:56 am

FIREchief wrote: ↑Sat Oct 03, 2020 11:09 pm How does anybody know how much they’ll need between today and death?

I would distinguish between needs and wants. The median household income is $62k. If someone's sitting on $5+ million, they have more money than most people will ever earn in a lifetime on an after-tax basis. By any reasonable standard, they have as much money as they will ever need, but not necessarily as much as they might want to spend. As a rule of thumb, if you have to worry about the federal estate tax, you have as much money as you will ever need.

firebirdparts · Post by **firebirdparts** » Sun Oct 04, 2020 8:57 am

I’m not sure why you’d need to read a book or article or blog about that. Some people want to leave a big donation to something and that’s their business. If you’d never given any money away, then yes, you some training. But I think it’s okay to make up your own mind if you’ve a basic bit of experience.

HueyLD · Post by **HueyLD** » Sun Oct 04, 2020 9:07 am

My goal is to die with my last check of $10M bounced.

catdoctor · Post by **catdoctor** » Sun Oct 04, 2020 9:12 am

flaccidsteele wrote: ↑Sun Oct 04, 2020 4:19 am
Kookaburra wrote: ↑Sat Oct 03, 2020 11:16 pm The article implies that one must spend money to have optimal experiences. I certainly don’t agree with that.
+1 ^ this

+2

unclescrooge · Post by **unclescrooge** » Sun Oct 04, 2020 9:16 am

HueyLD wrote: ↑Sun Oct 04, 2020 9:07 am My goal is to die with my last check of $10M bounced.

I'm not sure you have to wait until your deathbed. You could probably bounce a$10 million check today. Might as well get that off your bucket list.

afan · Post by **afan** » Sun Oct 04, 2020 9:29 am

Cyclesafe wrote: ↑Sat Oct 03, 2020 9:27 pm Longevity risk can be managed through social security and a SPIA topper. That's my plan.

SS has inflation protection built in, although it is running out of money.

SPIAs no longer offer much or any inflation protection.

afan · Post by **afan** » Sun Oct 04, 2020 9:31 am

Kookaburra wrote: ↑Sat Oct 03, 2020 11:16 pm The article implies that one must spend money to have optimal experiences. I certainly don’t agree with that.

+3

That goal is arbitrary and self indulgent.

There are lots of things more important to me that buying pleasurable experiences. Trading money for hedonism does make it onto my list of goals at all.

willthrill81 · Post by **willthrill81** » Sun Oct 04, 2020 9:45 am

000 wrote: ↑Sat Oct 03, 2020 9:05 pm What if expenses increase dramatically in twilight years?

What if human life expectancies increase dramatically?

What if spending doesn't give as much satisfaction as the security of having enough?

I doubt that the second of those is worthy of too much concern. Those over 70 have only gained about one year of life expectancy per decade since 1950. But I agree with the others, especially the last.

"Enough is a good as a feast."
- British Proverb

oldfort · Post by **oldfort** » Sun Oct 04, 2020 9:50 am

000 wrote: ↑Sat Oct 03, 2020 9:05 pm What if human life expectancies increase dramatically?

This would be the least of my concerns. James Madison lived to be 85 and 85 is considered a relatively long life for a man today.

flaccidsteele · Post by **flaccidsteele** » Sun Oct 04, 2020 9:52 am

unclescrooge wrote: ↑Sun Oct 04, 2020 9:16 am
HueyLD wrote: ↑Sun Oct 04, 2020 9:07 am My goal is to die with my last check of $10M bounced.
I'm not sure you have to wait until your deathbed. You could probably bounce a$10 million check today. Might as well get that off your bucket list.

1210sda · Post by **1210sda** » Sun Oct 04, 2020 9:53 am

Cyclesafe wrote: ↑Sat Oct 03, 2020 9:27 pm Longevity risk can be managed through social security and a SPIA topper. That's my plan.

Does your plan include the possibility of needing LTC?

JoeRetire · Post by **JoeRetire** » Sun Oct 04, 2020 9:55 am

Seems pretty silly to me.

Taking the proposed route means that if you abandon conservative personal finance principles and guess wrong, you are poor before you die, and perhaps a burden on your family.
Taking the more traditional approach means if you guess wrong, you leave less to charity and your family than planned, but aren't ever poor.

I know which route I'd rather take.

Of course nothing is absolute. Despite the author's sudden decision to abandon conservative personal finance principles, few people really end up broke exactly upon their death, and few people are misers with charity and family. Most folks are somewhere in the middle.

We have always given plenty to folks we care about and will always do so. But we'll almost certainly end up leaving a decent legacy unless the world and/or market tanks. I don't plan to abandon my personal finance principles just because 2020 was a difficult year. I lived through difficult years before. I'm still staying the course.

1210sda · Post by **1210sda** » Sun Oct 04, 2020 9:57 am

unclescrooge wrote: ↑Sun Oct 04, 2020 9:16 am
HueyLD wrote: ↑Sun Oct 04, 2020 9:07 am My goal is to die with my last check of $10M bounced.
I'm not sure you have to wait until your deathbed. You could probably bounce a$10 million check today. Might as well get that off your bucket list.

Funny!!
and clever!

Broken Man 1999 · Post by **Broken Man 1999** » Sun Oct 04, 2020 9:58 am

If one can end up not being a burden on their children (if any) or society, I say have at it!

At our age, I cannot honestly say we have enough to last until our passing. I'm 67, and my father's side of the family lived well beyond my age.

I have found myself repeating to our daughters what my father's words were to me and my siblings, "I don't want to be a burden to any of my children."

So, I think the responsible thing to do is to try not to be a burden to family, or the government. And, be generous to the family, but not be foolish and cut the retirement funds too close to continue to be self-supporting.

We already spotted the daughters to a debt-free college/graduate experience, and I'm working on the same for the grandchildren. So, we are certainly giving while alive so the daughters can concentrate fully on their retirements.

Generosity tempered by cautiousness works for me.

Broken Man 1999

willthrill81 · Post by **willthrill81** » Sun Oct 04, 2020 10:04 am

This would be possible, and retirement planning in general would be far easier, if we knew in advance when we would die. But we don't, so you can't (not with adequate safety).

The closest thing you can do is put 100% of your assets in SPIAs. Those don't offer explicit inflation protection though, they generally mean that you permanently lose all access to the annuitized funds, and they are completely illiquid. I would never recommend that anyone put more than half of their portfolio into a SPIA.

Even if retirees actually put 100% of their assets into SPIAs, they could still be concerned that the insurance company (or companies) that they brought the SPIAs from would go broke and that their state's guaranty association wouldn't cover them either.

All roads carry risk.

Wannaretireearly · Post by **Wannaretireearly** » Sun Oct 04, 2020 10:15 am

I'm with the general thought.
1. If healthcare wasn't a crapshoot, I may well be in the camp of retiring in my late 40's. Very envious of those that have.
2. SPIA : who has set this up in their 40's or 50's? Has it worked out, or to early to tell?
- if I were to take the next step for an SPIA, is this the right time? Early 40's.
3. Same question for LTC insurance. Seems such a quagmire of mostly bad products. Who has successfully (happily?) Set this up?
- from what I've heard here its too late for my mom (66). Is it too early for me (42)??

Thanks

oldfort · Post by **oldfort** » Sun Oct 04, 2020 10:17 am

Dying broke is stupid. There's too much uncertainty regarding future expenses, lifespan, inflation, and investment returns. At the other end of the spectrum are people who expect to be subject to the federal estate tax, which with portability will be ~11 million for a married couple after it reverts. If you literally have no idea how to spend money now to make your own life better, spend it on others. You don't have to wait until you're dead to start giving away to charity. Lots of worthy causes need money now. Giving money to your heirs when you're alive is likely to do them more good than getting a bigger inheritance when they're 65.

Leesbro63 · Post by **Leesbro63** » Sun Oct 04, 2020 10:18 am

oldfort wrote: ↑Sun Oct 04, 2020 10:17 am Giving money to your heirs when you're alive is likely to do them more good than getting a bigger inheritance when they're 65.

I've seen that go both ways.