Bill Perkins advocates for the 'Die With Zero' philosophy to encourage retirees to spend their savings on experiences.
Bill Perkins, the founder of Skylar Capital, introduced the 'Die With Zero' concept, which encourages retirees to spend their savings to enjoy life fully rather than accumulating a large bank balance at death. The philosophy suggests that people should aim to aim for a $0 balance, prioritizing memorable experiences and a 'memory dividend' that provides emotional returns over time.
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Financial advisers note that while the concept is popular, it requires intentional planning. Many retirees currently spend conservatively, often falling below the 4% rule, which suggests withdrawing 4% of a portfolio annually. A study by the Employee Benefit Research Institute found that one-third of retirees still have 100% or more of their initial assets remaining by their mid-80s. Advisers warn that those who do not meticulously plan may struggle with the 'Die With Zero' approach. For example, Ami Doshi of Hightower Signature Wealth noted that ultra-high-net-worth clients often prioritize non-negotiables like travel and long-term care. However, she also warned that spending more freely can lead to lost tax efficiency and the loss of a 'step-up in basis' for heirs who inherit assets after death.