Die with Zero by Bill Perkins

tiptop1_2

Having read this book, I'm a big fan of this approach i.e. die with zero!

Here is how we've implemented it. It's not for everyone and takes a leap of faith but can be done.
Some of our friends think we are crazy. Time will tell.

https://www.diewithzerobook.com/welcome

This may have covered before but basically it's saying to spend what you have and don't leave anything for when you die. That doesn't mean waste it, it means use your money in a proactive way while you can on the things you want.

This does include giving money early, for example to kids when they need it. This is great advice as there is a high chance that when you die they won't need it (they'll be old themselves!).

In reality:
- I've pulled money from the pot to give to children. They have used it to buy property and get going on the ladder
- I've made donations to charity
- We go on lots of holidays and buy a new car every 1 to 2 years
- If the markets have been kind. we go on a huge holiday every year - a total blow out
- The pot is going down - that's the point
- Switching to deaccumulation was hard mentally after years of saving but now it's a given
- I estimate I'm good until around 75 and then we'll live on the state pension and take the consequences. 
- In the meantime, life is great and we're building up a huge amount of positive memories to enjoy for years to come
- Our get out of jail card is the house. If we have to, we will downsize to release money. But that's not the plan. We might just do it anyway and spend or gift the extra.

The kids know they'll get nothing when I die. But - they've had it now and are enjoying it.

Who knows, if the markets do well, the kids will get more soon to use and enjoy.

The common push back I get is "what about care costs when you're old?". Well, a tiny % of people go into full time care and I'm taking the risk I'll be fine. We won't need much money from 75+, less from 80+, so why not enjoy rather than give to a care home. Plus our health at the moment is great, from 75 and 80 and 85+ it won't be as good. 

Hal17

Interesting, I have read the book and enjoyed it. Can I ask how old you are now? I thought your cut off at 75 seemed a little early.

SVaz

What happens when there are no longer two of you?   A £12k drop in income is a huge loss if you’re used to double that.

dunstonh

I would be concerned at several points
- age 75 is very early to move to breadline spending
- Breadline spending is harder to live with when you have been used to so much more.
- downsizing never delivers what the person expects unless it is really a significant amount.
- The pot is going down despite it being an above-average period for the stock market.    Even those with high draw rates should have seen stability or growth over the last 2 years.   So, this suggests an extremely high draw.

Maybe a level annuity would be the better option here (or lower level indexation).     Provides more early on and less later, but does continue to provide for life and doesn't require you to gamble your future lifestyle.

m_c_s

At 75 you could still have 20yrs left in life if you are in the lucky 10% club. 

Linton

I am over 75 with no essential beneficaries apart from my spouse. We continue trying to reduce the value of our pension pots with expensive holidays without great success and see no need to stop in the next few years. At 75 male life expectancy is 87 with a 10% chance of reaching 96. See here. Another reference gives the chance of at least one of a couple living beyond 95 as 50%.

The worst outcomes I think would be to die young, but you would not be alive to regret it, or to live to an old age without the means to provide yourself with the comforts you have become used to, when you may have little else to do but to regret previous choices.. 

artyboy

At 75 I hope to still be fit enough to spend a good proportion of my time traveling (and doing so in comfort). Each to their own but I would be allowing myself a good buffer and for a lot longer...

af1963

Using up all your resources apart from state pension before age 75 seems a 'brave' move. As you say you're both healthy, you're likely to still be pretty active at that age.

Could you extend it by adjusting the spending ? New car less often ?  Not quite such huge holidays ?

If there's a chance you might need the money, you could hold off on charity donations and then donate in your wills instead - charity still gets it if you don't end up needing it.

The value of the house *may* be available to help with care home fees, but you might end up in the position where one of you needs a care home while the other one still needs somewhere to stay.  Relying on a council-funded home is another 'brave' decision.

leosayer

Live entirely on the state pension from age 75 so that I can buy a new car every couple of years?

I love cars but no thanks. 

Moonwolf

I’d be happy to die with zero if I knew:

How long I will live (annuities can make this less of a concern)

Any and all possible care and care home fees are covered, we don’t really have good insurance policies in this country and various inquiries have suggested government backing for such schemes making them better value and more secure but nothing has ever been done.

Personal inflation and tax will never significantly change to my detriment, for instance a long term freeze in personal allowance.

Housing is a challenge, rent inflation is different to general inflation but the costs of owning a house might be very different if I live another 5 years or another 50, both are possible.

phlebas192

Die with zero is the perfect solution, but only if you get it right. If you don't, your last days/months/years will be so awful that you will wish you had ended it all before you had run out of cash. 99% of people won't get it right.