The New York Times published a book review on July 12, 2020 that bears noting. It has an ominous title, “Die With Zero”, but it does highlight an interesting perspective on retirement planning. As the review states, the book covers important concepts on “why you save and how you live.”
Most financial and investment planners will tout the benefits of tax-deferred saving. The benefits of compounding of returns within tax-deferred accounts are well-documented and, everything else being equal, tax-deferred accounts always beats taxable accounts on an after-tax total return basis over any time horizon. So, if that is the case, keep the money invested in tax-deferred accounts as long as you can. But, for what purpose??
Certainly, as I have indicated in previous blog posts (“Is there a Number for You?”, https://www.dattilioash.com/our-blog/2020/4/30/is-there-a-number-for-you), cash flow testing of expenses and income overlaid with your investment portfolio is important to help you determine your probability of retirement success. If you have a high probability of success and a good amount of excess “cushion”, then you owe it to yourself to think about how you want to deploy the excess – whether save it for your heirs, gift it currently, or spend it currently on something that you value.
These are very personal decisions and only you can decide on the best answer for you. My role, as an investment planner, is to bring this point to your attention and identify the pros and cons.