re: Retirement nest egg - rethinking 4% rule, size of treasure chest we leave to descendants

You need (or needed) to read Die with Zero by Bill Perkins

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spend it all on your kids / grandkids

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Goal would not simply be to “spend it all” on them.

Enjoy together (trips, family assets), use to set them up for success into the future, help others / charity, etc.

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I’ve seen this happen twice. It’s the difference between beating able to afford in home care or someplace nice rather than being in a spot where you can’t afford to take care of yourself. SS isn’t even close depending on what happens.

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Yep, a relative has been on hospice care for a few months and it is running ~$16k per month.

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I agree with the idea of dying with zero, but the best way to do this is to slowly give your assets to your children over time in order to avoid as many tax penalties as possible.

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I think that’s part of it, but the goal isn’t simply to reduce tax liability.

I haven’t read the book, but as others have mentioned I think it’s more speaking to the fact that you’d enjoy the fruits of your labor and give your descendants the intended “leg up” much more effectively when your kids are young-ish adults starting their own families.

Helping them with house downpayment, private school/college expenses, nice family vacations etc etc packs a bigger punch than leaving your 60+ year old kids with a few extra million. The opportunity for that money to really supercharge their lives and your grandchildren’s lives will have passed by then.

I have never understood the thought pattern of not leaving inheritance for my kids.

When they are young, everyone of us wants the best for our kids. We push to get them to do their homework, make good grades, and be productive citizens. We seek out the best schools, sports programs, music teachers, etc. and often spend a lot of money trying to help our kids do better than those around them.

Yet, now we are thinking "I am not giving them anything or just a little cause I don't want them to be worthless." Well, if you raised them right, and worked to educate them on how to handle any inheritance, then that should not be a problem.

I plan to do everything I can to continue to set high expectations for my kids (that are grown now) and to have a workable plan in place for them to not only use any inheritance I pass on, but also to carry this forward to their children. I hope this inspires them to be good stewards.

All that being said, I am going to live my life to the fullest while healthy.

To the OP, just carry on your life as you have with the occasional splurge. I doubt you are going to all of the sudden start lavishly spending just so you don't have too much left at the end of life.

Build a family legacy.

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I have never understood the thought pattern of not leaving inheritance for my kids.

When they are young, everyone of us wants the best for our kids. We push to get them to do their homework, make good grades, and be productive citizens. We seek out the best schools, sports programs, music teachers, etc. and often spend a lot of money trying to help our kids do better than those around them.

Yet, now we are thinking "I am not giving them anything or just a little cause I don't want them to be worthless." Well, if you raised them right, and worked to educate them on how to handle any inheritance, then that should not be a problem.

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Some don't want to create spoiled trust fund kids, but I think the majority who talk about not leaving anything to inheritance are talking about spending their money on their kids while they are still alive.

They aren't talking about leaving little inheritance because they spent it all on themselves in retirement.

I can see it from both sides.



That being said, I wonder if there's something to be said about the family dynamic of adult kids being gifted tens/hundreds of thousands and how that impacts the relationship.

It's healthy to have reasonable boundaries outside your nuclear family and to be able to live "independently" for lack of a better term. Does that get compromised if you are contributing to their house down payment or helping pay for your grandkids private school? You may feel a certain way if you just stroked a check for your grandchild's private high school tuition and then your son tells you they are spending Christmas at the in-laws.


Basically it's less efficient to leave a giant nestegg after passing, but spreading the wealth earlier can (and frequently does) cause problems of its own. I know for a fact my wife would be incredibly uncomfortable and would likely just outright reject any offers from either of our parents to help with things like housing or schooling costs.

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Some don't want to create spoiled trust fund kids,

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Hence my remarks about expectations and educated my kids on being good stewards.

I agree it would be foolish to just have a large nest egg sitting in account that they have access to at death and you have never involved them in the financial process. It would be a coin flip on what happens.

The families I know that have generational wealth that have managed to keep the family together, close and fiscally sound got that way and stay that way through consistent action. It has too be challenging but it is something that can be accomplished.

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Some don't want to create spoiled trust fund kids, but I think the majority who talk about not leaving anything to inheritance are talking about spending their money on their kids while they are still alive. They aren't talking about leaving little inheritance because they spent it all on themselves in retirement.

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This!

A balance of splurging now and again for ourselves while helping with their kids’ 529s, maybe a house remodel / project, treating on extended family vacation, etc.

They are trained up on finance decisions, value, cost, risk thinking. They have their own gumption. Don’t want anything “free”. We just want to take the surplus into life, not death.

Just my opinion, but want to remove any incentive for your kids to excel, leave them an inheritance. We have never planned around leaving our kids an inheritance and they don't expect one either. This is good. If we die before we anticipate, of course I'll leave them an inheritance, but I don't want them anticipating or planning around it.

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You believe SS will cover 80% of Long Term Care cost, am I understanding that correctly?

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No.

SS will cover approx half of long term care in today’s dollars. Nest egg and pensions would handle the difference plus spouse expenses. I suspect elder care costs run at higher inflation rate than CPI so need to project that out.

Future inheritance above n beyond, if life follows typical natural order.