> Frugality inertia: a lifetime of good savings habits can’t be transitioned to a spending phase
I think a lot of financial planners start from a base assumption that their clients will be happiest if they spend their accumulated wealth. That’s not true in my case (at least as far as I can self-analyze).
Whatever we don’t spend isn’t lost potential for us, but rather is future potential for our kids. Taking only the financial sorts of potential, some of that is embodied potential (money spent on education and health); others are concrete figures on finance statements.
We could spend more and seek to “have the check to the undertaker bounce”, but it’s a lot less stressful to my mind to have a low 7-figure balance be the much more likely ending net-worth, giving us a cushion for our later years and knowing that’s enough to be helpful but likely not enough to be detrimental to our kids.
>Whatever we don’t spend isn’t lost potential for us, but rather is future potential for our kids
That's extremely lazy. If your children follow the same pattern then no one will ever benefit. It was all for nothing.
So your kids will spend the savings but when will they spend those savings? After your death when they are in their 40s and 50s and long past the point where they need your help or while they are still young and you spend time with them?
It's a matter of capacitance and safety against being broke. Being broke and needing services at age 95 is a pretty bad spot to be in. Dying at 85 instead of 95 and, as a result, dying with $1-2M in assets isn't nearly as bad.
If the present is any predictor, I'm sure we'll spend adequate time and other resources (financial and not) with them while we're alive, but in order to minimize the chance that we'll become a financial burden to them, we're very likely to live in a way that will unavoidably present them a surplus at the end.
If that's lazy, then we're proudly lazy, and we come from a long line of lazy people.
Just because nobody spends the money doesn't mean nobody benefits.
If I've got a bunch of money in my account that I'd rather not spend, because I want to keep it for a rainy day, I can still spend the dividends. I can also spend more of my income, if I'm satisfied that the bulk amount is enough that I no longer need to save more for emergencies. I can also be less worried about increasing or even maintaining my income; so I can find a job that makes me more happy instead of one that makes me more money; or work less hours or retire earlier.
Having a target dollar amount for savings and not just increasing it without reason does help maintain perspective though. In my mind, from a very priviledged place, I'd like to be able to pay for long term memory care for several years, even in the face of a market crash and high inflation. Anything more than that, is kind of silly to retain; but I'm still frugal, so spending freely isn't spending frivalously.
Check in with your kids about this. I'd rather my parents spend what they have saved. I don't need or really even want them to pass anything on to me. I'd much rather they enjoy their retirement more, pay for more visits to their grandchildren, and have lots of interesting stories and about what they've been doing to tell them.
If we knew when we’d die and how much care would cost from 80 until death, that would be easy. It’s unknowable and my wife’s family has exceptional longevity in most of her genetics. She could realistically blow out a Roman numeral C candle on a cake. Or she could die at 75… One set of my grandparents passed quickly in their 60s; the other in their 90s (with over a decade of independent then assisted living then years of memory care)…
Yes but you have to choose a philosophy either way. I'm saying the philosophy of "we want to leave our kids money" should be run by those actually kids before it is pursued. In my experience most adult children don't want their parents to focus on leaving them anything.
The chosen philosophy is “we don’t want to run out of money before we run out of heartbeats”.
Having money left over is a by-product of that, not a primary goal. If the kids don’t want the money in the end, they’ll figure out some way to dispose of it I’m sure.
This seemed contradictory to your original comment. But I went back and read it and I guess it isn't quite so much as I thought. But a seven-figure cushion seems pretty unnecessary to me. That's a lot of wiggle room! But :shrug:, you do you.
Yeah it's weird. The optimization function seems to maximize the spending rate from retirement age to death, which happens of course when you hit $0 at death and save as much as possible before retirement.
I think a lot of financial planners start from a base assumption that their clients will be happiest if they spend their accumulated wealth. That’s not true in my case (at least as far as I can self-analyze).
Whatever we don’t spend isn’t lost potential for us, but rather is future potential for our kids. Taking only the financial sorts of potential, some of that is embodied potential (money spent on education and health); others are concrete figures on finance statements.
We could spend more and seek to “have the check to the undertaker bounce”, but it’s a lot less stressful to my mind to have a low 7-figure balance be the much more likely ending net-worth, giving us a cushion for our later years and knowing that’s enough to be helpful but likely not enough to be detrimental to our kids.