(Daily360.com) – We’re always hearing that we’re not saving enough. Banks, financial advisers, and even parents — they all tell us to put away as much as possible, building up cash reserves and retirement funds. But is this outdated? Research suggests it might be, and one 2020 book presents a radical solution.
Should You Die With Zero? by @dollarsanddata https://t.co/P9ne7SnVte
— Gary @ SuperSavingTips (@sst_gary) August 11, 2022
Saving for retirement is vital, but the numbers show that 58% of US retirees don’t even spend all the interest their investments earn. Just one in seven is drawing down the principal. The average retiree who dies in their 60s leaves a net wealth of $296,000 — and if they make it to their 70s or 80s, that figure goes up! Forget not saving enough; most of us might actually save too much.
Hedge fund manager Bill Perkins agrees. In his 2020 book “Die With Zero,” he says every dollar you leave behind when you die represents wasted life energy. Perhaps you worked for it but didn’t need it, so why bother working for it? Or maybe you wanted to give it to your children, so why wait until you die?
Instead, says Perkins, you should aim to die with a net worth of $0.
Just how sound is that advice? Realistically, not very. Costs are unpredictable, especially as you age. What if unexpected medical bills wipe out the savings you planned on using to finance the rest of your life? What if you live longer than expected and find yourself broke and looking for work at 90?
Even if dying with zero isn’t the most sensible goal, though, it’s definitely food for thought. Do you really need to save every possible cent and leave it for lawyers to fight over after you’re dead? Or could you find a better use for some of it now?
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