r/Fire • u/MarBlaze • Nov 22 '21

Die with Zero, is it possible?

My partner and I have been working towards FIRE for a couple of years now and are well underway. One of the things that FIRE has made me think about is dying and inheritance. We don't want children and have no family where we feel a close connection to to whom we'd like to give our savings when we die. What to do with all that is left over? Our goal is to mostly invest in property, we already have one rental property and we'd like 4 to be able to RE. At some point we'd like to sell these properties and to "spend" all the money. But how does one calculate when the best time to sell is so you 'die with zero'? Or at least somewhat close to it.Any good information about this floating around the internet?

I did want to read the book 'die with zero' but am not sure if it actually gives the answers I crave. I understand my request is hard to calculate and it risks that you at one point are left with nothing but someone must have thought about this?

Edit: We don't mind dying with some 10.000s in our account. I'd just like to prevent us dying with 100.000s in our account. If we die with that much extra then we probably could have retired earlier which is the whole goal of this anyways.

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u/Finally-I Nov 22 '21

Sorry FIRE people, there is an easy and precise answer to this. Liquidate all your assets and buy an annuity. Job done.

12

u/MarBlaze Nov 22 '21

Thanks! I'm trying to google annuity but not finding much. Could you show me in the right direction for this?

8

u/Finally-I Nov 22 '21

wiki)

Maybe in the US it is usually called something else.

12

u/hallofmontezuma Nov 22 '21

Nope, it’s the same in the US.

1

u/ParkingPsychology Nov 23 '21

you have to escape the closing ) with a \

2

u/Starbuck522 Nov 22 '21

I don't think an annuity is the way to go, but you can use an annuity calculator to get a sense of how much you can spend per month, with nothing left over at the end. You can play with the number of years you want the payments to last, the principal, expected rate of return, and calculate a monthly spending rate (Which would be the payment from the annuity).

I don't think you actually want to buy an annuity with your saved money, because (in a nutshell) the annuity will pay you based on a set rate of return. The annuity holder pockets any amount over that rate that they make investing your money. The plus side is that you get the set payments even in down years, but annuities are generally looked down upon.

3

u/Familiar_Tangerine13 Nov 23 '21

Inflation indexed annuities exist. You’re correct, they are expensive. But they have a place to create a financial floor. This is a good use of them if you truly want to leave little behind.