"Die with zero" focuses on using money throughout your life, not just stockpiling it for retirement.
It can help you spend on meaningful experiences and give to loved ones while you're alive, as long as you stay within your means.
The biggest risk is running out of money later, especially if healthcare costs rise or you live longer than expected.
With traditional retirement planning, you typically try to save all throughout your working years, often by living frugally, which ideally gives you enough funds to last you your entire retirement. You might even have some money left over to give your children as an inheritance.
The "die with zero" (DWZ) movement, in contrast, says you should spend and give away all of your money throughout your lifetime so that you can maximize your sense of comfort and number of positive experiences.
Each approach comes with its own pros and cons, and there's a lot to consider. So for this article, we connected with an expert to help you figure out if the DWZ strategy is right for you.
The DWZ strategy "encourages you to maximize spending throughout your life, not just in retirement," says Jill Fletcher, a certified financial planner with Cary Street Partners. "The name 'die with zero' assumes that you don't need your money to outlive you, so it's okay to spend it throughout your life, rather than hoarding for retirement."
Instead of focusing on optimizing wealth for retirement, DWZ is a call to action to optimize your wealth throughout your lifetime.
As Fletcher says, "a 'die with zero' mindset would tell you to take the Yosemite backpacking trip in your 30s and save the Yosemite Valley Lodge stay for when you are in your 70s."
With a DWZ strategy, you don't have to wait until retirement to start doing things you enjoy. That often means prioritizing unique experiences. For example, if you were following a DWZ strategy, you might take several memorable family vacations, rather than waiting to travel when you're retired.
However, following DWZ doesn't mean you should live beyond your means. Take that week-long safari abroad if you can afford it—but only if you can afford it. (That means you pay for it with cash, not credit cards or loans.) The idea is to balance your present joy with your long-term goals.
Fletcher notes that this strategy can help make the transition to retirement easier—that is, some people who follow a traditional retirement strategy find it difficult to start spending money after saving for retirement for decades.
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