Die With Zero: Spend Down or Leave a Legacy?

You spent decades building your nest egg. You tracked contributions, weathered market downturns, maxed out your 401(k) when you could, and finally crossed the finish line into retirement. Now comes the part nobody really prepares you for: spending it.

For many retirees, that's surprisingly hard to do. The same discipline that built the account now makes it feel wrong to draw it down. Meanwhile, a growing conversation in personal finance circles is pushing back with a provocative idea: what if leaving a large inheritance is actually a sign that something went wrong?

That's the core argument of the "Die With Zero" philosophy, popularized by Bill Perkins in his 2020 book of the same name. It's sparked real debate among retirees, financial planners, and heirs-in-waiting alike. And whether you find it liberating or alarming, it raises questions worth sitting with. Let's walk through both sides honestly.

The core idea is simpler than it sounds. Bill Perkins argues that money is a tool for generating life experiences, and that a dollar unspent at death is a dollar that produced zero value for you or anyone else. Under this framework, the goal isn't to maximize your account balance at death. It's to maximize your lifetime experiences while you're still healthy enough to enjoy them.

Perkins introduces the concept of a "memory dividend," the idea that spending on meaningful experiences while you're younger and healthier generates returns in the form of rich memories that compound over time. A trip to Italy at 65 when your knees still cooperate is worth more than the same trip at 80 when it might not be possible at all.

This connects to something many retirees discover naturally. Retirement spending tends to follow a pattern where active, higher-spending "go-go" years give way to quieter spending in later life, before healthcare costs often spike at the end. In other words, your window for certain kinds of spending may be narrower than you think.

The Die With Zero strategy isn't really about hitting a balance of exactly $0.00 on your last day. It's more of a philosophical orientation: be intentional about spending your money on what matters, rather than hoarding it out of habit or fear.

Of course, many retirees have strong and deeply personal reasons for wanting to leave something behind. And those reasons deserve equal respect.

For some, it's about family. Passing wealth to children or grandchildren, helping with a down payment, funding a grandchild's education, or simply providing a financial cushion can feel like one of the most meaningful things a person can do. For others, it's philanthropic: leaving money to a church, a charity, or a community organization that reflects their values.

There's also a practical dimension worth considering. Many adult children are navigating their own financial pressures, from student loans to housing costs to saving for their own retirements. An inheritance, even a modest one, can genuinely change trajectories.

One nuance the Die With Zero debate often overlooks is that supporting family financially doesn't have to mean waiting until you die. Gifting while you're alive, sometimes called "giving with warm hands," allows you to see the impact your generosity has. In 2024, the annual gift tax exclusion allows individuals to give up to $18,000 per recipient without triggering gift tax reporting requirements (IRS Revenue Procedure 2023-34). You can also directly pay tuition or medical expenses for anyone, with no gift tax implications, as long as payment goes directly to the institution.

Estate planning tools like trusts can also give you control over how and when assets are distributed, which some people find more satisfying than a simple lump-sum inheritance.

Here's where the Die With Zero philosophy runs into a practical wall: you don't know when you'll die.

This isn't a morbid observation, it's a genuine financial planning challenge. If you plan to spend down your assets and die at 85, but actually live to 97, you've got a serious problem. Longevity risk, the risk of outliving your money, is one of the most significant financial dangers retirees face.

Social Security provides a lifetime income floor, which is one reason delaying benefits can be so valuable for people in good health. But Social Security alone rarely covers all of a retiree's expenses. Beyond that, there's healthcare. Long-term care costs, in particular, can be staggering. A private room in a nursing facility can run well into six figures annually, and Medicare covers very little of it. These costs are notoriously difficult to predict.

This is why most financial planners don't encourage retirees to target a literal zero balance. Instead, a more common approach is sometimes called a "guardrails" strategy, where spending adjusts up or down based on portfolio performance and remaining life expectancy. Think of it as Die With Zero as a philosophy paired with practical safety nets.

One widely discussed framework is the idea of a "floor" of guaranteed income, from Social Security, pensions, or annuities, that covers essential expenses no matter what, with discretionary spending drawn from savings on top. This structure allows for generous spending without the terrifying risk of running out.

Whether you lean toward maximizing experiences or preserving a legacy (or some combination of both), a few practical approaches come up frequently in conversations about retirement decumulation.

Dynamic withdrawal strategies: Rather than a fixed withdrawal rate, some retirees adjust how much they take from savings each year based on portfolio performance. In strong market years, spending more is an option. In weak years, pulling back can help preserve the portfolio. This flexibility can make it easier to spend more confidently in early retirement while still protecting against the later years. It's worth understanding how safe withdrawal rates have evolved and what that means for your own planning.

Life expectancy planning: Tools from the Social Security Administration (ssa.gov) and various actuarial tables can give you a starting point for thinking about longevity. A healthy 65-year-old woman has a meaningful probability of living into her late 80s or beyond. A couple at 65 faces even longer combined odds. Planning to a conservative age, say 90 or 95, is one way to give yourself margin without leaving enormous unspent wealth behind.

Staged gifting: Rather than leaving a lump-sum inheritance, some people choose to give in stages, helping with a grandchild's college tuition now, contributing to a child's home purchase in a few years, and so on. This approach can reflect the Die With Zero spirit of seeing money create value while you're alive, while still honoring your desire to support family.

Charitable giving strategies: Qualified Charitable Distributions (QCDs) from an IRA allow people aged 70½ and older to direct up to $105,000 annually (indexed for inflation from 2024 onward, IRS Notice 2023-75) to a qualifying charity directly from their IRA, satisfying Required Minimum Distributions without the amount counting as taxable income. For those with charitable intentions, this is a tax-efficient way to "spend" the money on something meaningful rather than letting it accumulate.

Consider how your portfolio is structured: The order in which you draw from different accounts, taxable, tax-deferred, and tax-free Roth accounts, can significantly affect both how long your money lasts and what you ultimately leave behind. This is an area where a qualified financial adviser can add real value, since the "right" sequencing depends on your specific tax situation and goals.

It would be incomplete to talk about this topic without acknowledging that for many retirees, the challenge isn't philosophical, it's psychological. Disciplined savers often find it genuinely difficult to shift from accumulation to spending, even when their finances clearly support it.

Decades of frugality and saving can make spending feel irresponsible, almost like a moral failure. Some retirees feel deep anxiety watching their balance decline, even when the decline is entirely planned and sustainable. The fear of running out can be so powerful that it prevents people from enjoying what they actually have.

On the flip side, some retirees feel guilty about spending on themselves when they could be leaving that money to their children or grandchildren. Both of these psychological patterns are worth being aware of, not because one is right or wrong, but because they can lead to decisions that don't actually reflect your values and priorities.

If you find yourself either spending too freely without a safety plan or hoarding money you're genuinely afraid to touch, that tension is worth exploring, ideally with a financial adviser or even a financial therapist, a growing specialty that bridges money and emotional wellbeing.

This article is intended for general informational and educational purposes only. It does not constitute personalised financial, tax, legal, or investment advice. Every individual's financial situation is unique. Before making any decisions about retirement spending, inheritance planning, or investment strategy, please consult a qualified financial adviser, tax professional, or estate planning attorney who can assess your specific circumstances.