Turning Savings into Lifestyle During Retirement
If you’ve spent your life diligently saving for retirement, the idea of drawing down those savings can feel uncomfortable. After decades of “save, save, save,” many retirees find it hard to flip the switch to “spend and enjoy.”
But what if the key to a rewarding retirement isn’t preserving every dollar, but using your money wisely and intentionally to create experiences, support your family, and reduce stress? That’s the idea behind the philosophy of Die With Zero, which encourages people to make the most of their wealth while they can still enjoy it.
This isn’t about being careless. It’s about a mindset shift. With the right strategy and support, it’s possible to strike a healthy balance between security and enjoying the fruits of your labour.
The Hardest Shift: From Saver to Spender
Many retirees continue to think like savers, even when they’ve reached financial security. Spending can feel “wrong” or even irresponsible. This is often a behavioural bias rather than a reflection of actual financial risk.
For example, consider a couple with $1.7 million in assets. They were hesitant to pay $500 per month over three years, $18,000 total, for comprehensive advice. But that cost represented just over 1% of their total assets. In reality, a single poor decision without advice could cost them significantly more.
This highlights how emotional discomfort around spending can be overcome with clear, strategic planning. A well-informed plan can empower retirees to spend with confidence while still protecting their long-term interests.
What Die With Zero Gets Right
Bill Perkins’ book Die With Zero argues that people should aim to spend their money earlier and more intentionally, prioritising experiences and family support while they’re still physically and mentally able to enjoy them.
One key concept is timing. For example, helping children in their 30s or 40s when they may need financial support the most, or taking that dream trip while health permits. Delaying these choices may reduce their impact or enjoyment.
However, it’s important to recognise the limitations of this approach. Life expectancy, health care costs, and aged care needs remain unpredictable. Responsible planning requires balancing the desire to spend with contingencies for the future. ASIC and financial advisers are clear that running out of money early in retirement is a significant risk that must be considered.
The Value of Financial Advice in Retirement
Retirees sometimes question whether financial advice is necessary when their spending is “simple” or modest. “I only need $80,000 a year, why pay for advice?” is a common thought.
However, advice is not just about managing investments. It’s about structuring your finances effectively. Good advice may help reduce unnecessary tax, optimise Centrelink entitlements, or create more flexibility in income streams, all within the framework of ASIC’s best interests duty and appropriate advice obligations.
In one case, advice fees of $35,000 over three years on a $1.7 million portfolio amounted to roughly 2% of total assets. If those fees helped avoid a poor investment decision or saved $20,000 in tax, the value of the advice could be significantly higher than the cost.
Moreover, advice should not be viewed as giving up control. Instead, it provides a framework to support informed decision-making. This allows retirees to live more comfortably and confidently.
It’s Okay to Enjoy Your Money, That’s What It’s For
Many retirees have a strong financial foundation, such as a mortgage-free home, healthy superannuation, and manageable living costs. But if that wealth is not being used to improve quality of life, it may not be serving its full purpose.
This doesn’t mean abandoning caution. Having a buffer for aged care or unexpected costs is wise. But it’s also okay to allocate some resources toward lifestyle enhancements. That might include travel, home support, or gifting to family.
Spending money with intention and within a structured plan is not wasteful. It is part of responsible financial stewardship. The Corporations Act and ASIC guidelines encourage advisers to support clients in achieving their objectives, which often include more than just financial preservation.
You Don’t Need to Die With Zero, But Don’t Die With Regret
The idea behind Die With Zero isn’t about leaving nothing behind. It’s about using money purposefully during the most meaningful stages of life.
After meeting core needs and setting aside contingency funding, the remaining wealth can be used for enjoyment, support, and creating memories. The aim is not to spend recklessly. The aim is to ensure your retirement is fulfilling as well as financially secure.
Final Thought: Invest in Living, Not Just Earning
Retirement is not an endpoint. It’s a new chapter. Shifting from a savings mindset to a spending mindset can feel risky. But with the right guidance, you can create a plan that gives you clarity and peace of mind.
Whether your goal is to travel, help family, or simply enjoy your lifestyle, strategic financial advice can help align your resources with what matters most to you while staying within the guardrails of compliance, sustainability, and your best interests.
Important Information
This article contains general information only and has been prepared without taking into account your personal objectives, financial situation or needs. You should consider the appropriateness of this information in relation to your circumstances before acting on it. We recommend you seek personalised advice from a qualified financial adviser who can assess your individual situation. Before making decisions about financial products, consider the relevant Product Disclosure Statement (PDS) and other disclosure documents.