No dosh at death

I keep hearing that for a comfortable retirement, I need more than $1 million in super and other assets. However, this strategy leaves a nice tidy sum once I die. Frankly, I'd rather spend it before I die.

My question is, what about those of us who don't have dependents or kids to leave our inheritance to? What should our strategy be? My objective would be to die with zero assets (no home) and a few thousand in the bank to leave to charity.

I'm 51 with no mortgage, a house worth more than $1,500,000, super of $250,000 and other assets of approximately $250,000.

What's the right strategy for people without dependents who don't want to leave their money to charity or the government when they die?

ANSWER

The problem with planning for retirement is that none of us know how long we’ll live, or what the state of our health will be, or how the government may change the rules, or what disasters we may encounter if we invest badly. This is why it’s dangerous not to plan for retirement, or to spend recklessly in the belief you won’t need it when you get older.

A woman I know solved the problem perfectly – at the age of 90 she took out an indexed life annuity for around $200,000, which provided her with income for the rest of her life, and gave the rest of her money to charity. This gave her a guaranteed income for life and the pleasure of watching her money being well spent.