Should I Have Money Left Over When I Die?
This question may seem materialistic, filled with underlying assumptions, and a little morbid. It makes us uncomfortable. But it deserves an answer—and that answer is generally yes. Today’s blog will explain why and address some of the common Christian objections to wealth accumulation.
Where will the money come from?
There was a time that my idealized passing would have included a great round of golf, spending my last dollar on a package of plain M&Ms, consuming its contents, and keeling over. I’m happy to have moved past that phase toward a more fruit-bearing legacy plan.
Having money left at death is a byproduct of sensibly saving for retirement so we don’t run out of money. Three core uncertainties can put our future financial health in question:
Longevity – We don’t know how long we will live.
Returns – We don’t know how much return our portfolios will generate.
Care – We don’t know the extent of our long-term care expenses.
Longevity:
A prudent approach is to plan for a more expensive outcome than expected in each area. The longer you live, the more money you’ll need. The probability that one person in a marriage will survive to 94 is estimated at 20%. The odds of one member of a couple reaching 97 is 10%. Planning as though you’ll live to 95 or 97 gives you an extra cushion.
Returns:
The U.S. stock market gains about 10% per year on average. But what if the market doesn’t return as much in the future? Using a more conservative return estimate means you’ll need to save more for retirement, but if returns are lower than average, you’ll be fine. Since 1976, stocks have increased more than 6.68% in 80% of rolling ten-year periods. So, planning for a return of less than 7% should give you a modest buffer.
Care:
Most people who enter assisted living pass away within two years. Yet, one woman I met has been in assisted living for a decade. She is in her late 90s and is quite active. Planning for a few extra years on your stay doesn’t cover every possible outcome, but it gives you some cushion and time to adapt.
What happens if one or more of these risk areas end up being closer to the norm and not as dire? Living longer than 60% (rather than 80 or 90%) of the population, experiencing returns of 8%, or being in assisted living for 3 years are all worse than the traditional averages— but still better than expected. If your plan for retirement assumes more costly outcomes, you will likely have excess funds.
Objections:
Some Christians have a tough time with this approach. They believe “Scripture doesn’t talk about retirement or retirement plans, so we shouldn’t invest in them and just rely on God instead.” I would argue that Scripture also doesn’t mention cars (unless you count the apostles and disciples being in one Accord in Acts 2:1).
But seriously, the Bible has multiple stories, like the Babylonian exile (2 Kings 24-25), and Jesus’ instruction to “render to Caesar what is Caesar’s” (Mark 12:17) to name a few, that highlight a tension between participating in the world in which we live and trusting in God and his ultimate authority. We should use today's retirement systems to steward our assets well while ensuring we don’t treasure our balance sheets and serve the system. The anti-retirement approach elevates God’s role as provider to a higher level, yet seems closed to the idea that these retirement systems are often the very tools God uses to provide for us.
Another objection points out, “You can’t plan for everything because God is sovereign, so why try?” In its efforts to elevate God’s sovereignty, it finds it necessary to diminish the biblically endorsed idea of wisdom. This approach often creates anxiety for its practitioners because they are unnecessarily vulnerable to the trials and tribulations of life. Jesus tells us not to be anxious about our lives. A wise steward uses plans to reduce anxiety through prudent financial management (Proverbs 21:5), while realizing that no worldly system can create perfect security (1 John 2:17).
For some, these two objections merge. I recently heard someone praise the deep spirituality of a group of international workers for being so reliant on God that they didn’t have an emergency savings fund or invest in retirement. My first thought was That’s not spiritual, it’s poor stewardship. The good news for these workers is that when someone abdicates stewardship, our generous God often appoints someone else to serve as their “replacement steward”—and the people God appoints are often those who have used today's retirement tools to share their abundance.
In a future blog, I’ll delve into how better-than-expected outcomes can create opportunities for more generosity earlier in life. For now, let’s use the systems we have to create joy through healthy living, abundant generosity, and a well-planned estate that blesses the people we love and the ministries we hold dear.
