[USER]

Had a conversation with our retirement planner yesterday. One thing that came up and has me thinking now, is “What is the end goal here with our estate?”

This was brought up because we were talking about going from a “saving” state to a “spending” state in retirement.

Would love to hear people’s thoughts and WHY on this as well.

Context: Based on the Monte Carlo simulation, we have a 99% chance of reaching our goals.

My perspective ideally is to only spend the rental income and let equities/debt investments continue to grow. In my mind, we should also reinvest the dividends as well.

However, we have quite the spending habit and the rental income alone won’t be enough.

If we threw in the dividend/interests income, then we should be good.

So, what is the end goal of the estate? Is it to build it out as much as possible and leave it to the heir?

Is it to have financial security for us as retirees?

Originally, we were thinking to grow it as much as possible. Don’t spend the principle, just the income, etc. But now thinking about it, that’s kind of dumb.

Even if we spent all the cash investments (stocks/bonds), we would still leave a very sizeable real estate inheritance — theoretically, enough that the income generated means the heirs wouldn’t even need to have a real job (this is a whole different conversation as well.)

[Susan]

IMO definitely to have financial security to cover all expected and some unexpected outcomes like LTC but after that it’s a tougher decision.

How old are the heirs? It sounds like they don’t have much investing experience. So maybe gift them the max gift to open a Roth IRA and brokerage.

Sounds like you’re married so you could do double.

Coach them on investing now. Build that knowledge and experience. Plus time in the market beats everything so starting on this path while young would be great.

[Kenneth]

I retired last year. My goal is to die with as much as possible, while having a lot of fun along the way.

[Amy]

This is something that you planner needs to understand. Whether you want a higher income during your life or whether you prefer to have a higher estate value in the end.

There are tax considerations. I have no children so it’s obvious what my choice would be.

It’s good that he is bringing up the choice with you

[Nina]

My mother said her favorite aunt told her to “Give with a warm hand”, and has followed that guidance. My brothers and I have been lucky to get abut 10K annually from her for probably 20 years now.

It is not a ton on a yearly basis, but that has come in clutch many times when finances were just a little tight.

We have been able to thank her personally/live for the help.

While your kids are young, I encourage you to set up 529, Roth or UTMA accounts for them (in that order per my preference) and then once they are financially independent from you, give small but meaningful amounts to them in cash for them to decide how to use it.

It allows them to “earn” their own wealth with a few legs up from you.

I am very grateful, and now very successful in my own right as well.

[John]

It’s a very personal decision. I’m enjoying life and doing what I like without foolish spending on things.

I’m also doing Roth conversions so that if my heirs get a fat inheritance they can enjoy more of it rather than the tax man getting it

[John]

I would strongly suggest you read ‘Die with Zero’ because it was written for people like you who are asking the questions you are asking. What are you doing this all for, man?

What are you living this life for?

Should you keep hoarding all the fruits of your work and risk until you are laying in a bed old and tired without the ability to do anything you could do when younger (if you are even lucky enough to live that long)?

Is it even in the best interest of a child to give them so much money that they won’t ever feel the satisfaction of actually earning the life they lead?

[Simeon]

Money is a tool at the end of the day. What do you want it to accomplish for yourself?

A large legacy for your heirs, a fun and luxurious retirement, or a mix of both.

Having a large net worth just for the sake of it is pointless.

Enjoy your wealth.

[Russell]

To me, everything is a question of risk mitigation.
We don’t know when we will die. None of us are promised tomorrow. So, retire early enough to get to enjoy at least a week of it!

We don’t know what challenges the future will bring.

If you went back and told yourself in 2005 what life is like, between the economy and climate and politics, in 2025…I highly doubt that past you would nod sagely and say “just as I expected”!

“Dying with zero” is a great plan…for someone who can accurately predict the challenges they and their children will face in the coming years.

I can’t, so I’m a proponent of being more cautious and if I leave my kids and grandkids “too much”…that’s not a bad outcome.

Far preferable to the alternative of them needing help, or us having an unexpected cost, and not having the assets to handle it.

[Sunny]

Goal is to enjoy the money you worked hard to save up for.
If you have kids or organizations you’d like to donate to, decide what the goal is there.

[Matthew]

Suggest you pick up a copy of Die With Zero. The book tackles the topic well.

While I didn’t love the writing it has stayed with me and it’s an easy book to get through.

[Author]

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